Sugar tax in the Budget could add 24p a litre to a bottle of Coca Cola

RUKI SAYID , RHIAN LUBIN , DAN BLOOM
16 MAR 2016
Mirror UK
George Osborne’s sugar tax could add up to 24p to a litre of Coca Cola, it has been revealed.
The dramatic forecast is made by the Chancellor’s independent experts after he made his shock announcement today.
It would add a similar hike to Fanta, Irn Bru, ginger ale and Ribena, our research shows.
And Fanta, tonic water and Coke Life would all be hit by a 18p-a-litre lower rate.
Read more: Budget 2016 live: George Osborne reveals sugar tax, Lifetime ISA and boost for the rich
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The tax from 2018-19, which does not include fresh juices or milk products, is being levied on drinks firms, not customers – and will pay for a doubling of sport funding in schools.
Osborne and Fizzy DrinksGeorge Osborne’s sugar tax will hit fizzy drinks firms hard
But the Chancellor admitted: “Of course some will choose to pass the cost onto consumers and that will be their decision.”
The forecast came in the small print of analysis by the Office for Budget Responsibility – which looked at its target of raising £500million in its second year.
Experts wrote: “This currently implies levy rates of 18 pence and 24 pence per litre unit.
“These take into account a variety of behavioural effects which will affect the revenue raised.”
The 18p a litre rate would apply to drinks with between 5g and 8g of sugar per 100ml. The higher rate would apply to those with more than 8g of sugar.
That would mean a hefty 42p a pop rise on a family size bottle of regular Coke, with the price of a 1.75 litre bottle rocketing from £1.95 to £2.37
And the price of a 330ml can of Coke will soar from 68p to 76p while a 1 litre bottle of Lucozade Energy Pink Lemonade leaps from £1.50 to £1.74.
The tax will not apply to alcoholic drinks, even ones high in sugar, but will apply to mixers and mixer syrups sold into pubs, restaurants and bars.
The Chancellor said today he owed it to the next generation to introduce the tax to halt an obesity crisis.
He told MPs: “I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation, ‘I’m sorry’.
“‘We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing.'”
The “brilliant” change was hailed by a jubilant Jamie Oliver outside Parliament.
The TV chef – who has long campaigned for the move – said: “I never thought I’d actually get it.
“I didn’t think we’d get it because I never thought we had a Government which was big enough and brave enough to take on business and say, ‘Just a minute, when it comes to British child health, right, there’s a few rules’.
“And if you analyse what George has done, which I think is quite brilliant, hes given them enough time to reformulate.
“He’s also done it in bands, and on the upside, for parents and kids in Britain, this is over £500million into primary schools across Britain.”
Health campaigners have welcomed the tax but want to see it enforced immediately at a flat rate of 20% for all sugary drinks.
GettyV for victory! Jamie Oliver celebrates at Westminster
Professor Graham MacGregor, chair of Action on Sugar which has lobbied for the levy said: “We are delighted to see in today’s budget announcement that the government will be introducing a new sugar levy on soft drinks which will be used to double the funding they dedicate to sport in every primary school.
“However, for this to be effective it’s imperative that the levy is at least 20% on all sugar-sweetened soft drinks and confectionery and escalate thereafter if companies do not comply to reformulation targets – and this must be implemented immediately.”
And Malcolm Clark, co-ordinator of the Children’s Food Campaign hailed it as a “really important victory for children’s health”.
But the Food and Drink Federation – which represents fizzy drink firms – dismissed the sugar tax as “a piece of political theatre” that would cost jobs.
Shares in Irn-Bru dipped after the announcement
Shares in Irn Bru maker AG Barr fell 3% today, while Robinsons squash firm Britvic was down 2% and Vimto maker Nichols slumped 5%.
Federation director general Ian Wright said: “The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs.
Nor will it make a difference to obesity. “Many of those singled out today by the Chancellor have been at the forefront of efforts to provide consumers with healthy choices.
The industry will now ask whether such efforts are still affordable.” The sugary drinks tax will be imposed on companies according to the volume of the sugar-sweetened drinks they produce or import.