B&E | Britain publishes draft "Sugar Tax"

The government has said it expects the levy to raise 520 million pounds ($661.5 million) in the first year.

By Martinne Geller

Image Attribute: Coca-Cola Can by Kevin O'Mara, CC BY-NC-ND

LONDON, Dec 5 (Reuters) - Britain moved forward with its planned sugar tax on Monday, publishing draft legislation confirming a two-band levy for sugar-added soft drinks aimed at fighting obesity.    

In opting for a sugar tax, Britain joins Belgium, France, Hungary, and Mexico, all of which have imposed some form of tax on drinks with added sugar.    

Britain's tax, announced in March, is due to come into force in April 2018, giving sellers of soft drinks, such as Coca-Cola European Partners and Britvic, time to reduce sugar in their products.   

The companies, which sell Coca-Cola and PepsiCo  drinks respectively, have already been promoting no-sugar drinks such as Coca-Cola Zero Sugar and Pepsi Max cherry, which would be exempt from the tax.   

The British levy has two thresholds -- one of 18 pence per liter on soft drinks with more than 5 grams of sugar per 100 ml and one of 24 pence per liter on those with more than 8 grams per 100 ml.   

The draft was published on Monday by HM Revenue & Customs as part of an overview of legislative changes to tax law the government plans to introduce in its finance bill for 2017.       

The government has said it expects the levy to raise 520 million pounds ($661.5 million) in the first year.    

Sugar taxes have tended to focus on fizzy soft drinks, as health campaigners argue they are a source of empty calories. Yet the whole packaged food industry has been working to make its products healthier as consumers increasingly opt for fresher foods.    

Nestle earlier this month said it had found a way to potentially reduce sugar in chocolate by up to 40 percent without affecting the taste.    

As a whole, the industry opposes special taxes on food or drinks, arguing that they do not work and disproportionately hurt poorer people.   

"Evidence worldwide does not suggest that taxes of this sort have any impact on levels of obesity," Gavin Partington, director general of the British Soft Drinks Association, said in a statement, adding that the group would continue to work with UK Treasury officials during the process of implementation.    

 ($1 = 0.7861 pounds)   

(Reporting by Martinne Geller in London, editing by Louie Heavens and David Evans)  

(c) 2016 Thomson Reuters