The fruit juice and soft drinks landscape is changing. Here’s our low down on the newly introduced Sugar Tax.
What’s it all about?
The new Sugar Tax came into effect on April 6th. The tax aims to help reduce the number of calories that people consume on a daily basis through the reduction of sugar content in soft drinks.
It is expected to raise £240m a year which will be used to help fund primary school sports and PE programmes along with healthy school breakfast clubs across the country.
The sugar tax is part of a government initiative to tackle childhood obesity costing the NHS in England an estimated £5.1bn a year on overweight and obesity-related ill health issues. (NHS figures from 2014-15)
Who will this effect?
The Sugar Tax will impact on the sale of soft drinks across all sectors, including food service, grocery, convenience and licensed trade.
What does it entail?
Drinks containing more than 5g of sugar per 100ml are liable to pay a levy of 18p a litre. Soft drinks with over 8g of sugar per 100ml will pay a levy of 24p a litre.
What has the industry done to prepare for this change?
Drinks manufacturers have been actioning their Sugar Levy strategy for the last few years in order to help operators navigate this new legislation more easily. Recipes have been modified and, in some cases, sweeteners have replaced added sugars to help bring drinks in line with threshold levels. For those drinks that remain above the sugar level threshold, manufacturers have proposed price increases.
Does the Sugar Tax apply to all drinks?
No, the government has made allowances for small or artisan producers of soft drinks. Manufacturers of fruit juices and dairy drinks producing less than 1 million litres of served liquids a year are exempt from paying the tax. Therefore, here at Frobishers, as we fall into the small producer category, the levy does not apply to us.
What has Frobishers done to prepare for the Sugar Tax?
We’ve long been known for producing no-nonsense, not from concentrate, natural fruit juices and juice drinks. Our juices have never hidden behind artificial flavourings or colours and as such, we wanted to be open and transparent about the sugar content of our drinks and the measures we are undertaking to bring our juices and juice drinks in line with the levy. So, we’ve introduced our own self-imposed objective to reformulate our cordial range in order to be within government guidelines. Previously our cordials contained 6 grams of added sugar per 100ml of diluted product. However, we have now refined our recipe to bring this down to just under 4.9 grams of added sugar, with no compromise on taste.
How can operators prepare?
Operators need to ensure that menus and POS are up to date to reflect any price changes and that staff are well versed on the sugar content of particular drinks and respective implications of the levy. As with other ‘behaviour changing’ strategies introduced by government legislation, such as the recent charge for plastic bags within the retail sector, customer-facing staff are inevitably at the coal-face in terms of communicating the value of these initiative to consumers.
Most soft drink manufacturers, including ourselves, are happy to offer support and advice to help operators and their staff better understand and communicate the changes that the new Sugar Tax will bring into play, so please just drop us a line if you need further information.