Major Expansion of UK Sugar Tax Announced
The UK government has confirmed a significant expansion of the sugar tax, which will see popular drinks like pre-packaged milkshakes and lattes lose their long-standing exemption. From January 2028, these milk-based drinks will be subject to the Soft Drinks Industry Levy (SDIL), a move announced by Health Secretary Wes Streeting.
The decision, unveiled during a health questions session in the House of Commons, is part of a broader strategy to combat the nation's obesity crisis, particularly among children. The Labour government is pushing forward with these changes, originally conceived under the Conservative Party in 2016, to make a more substantial impact on public health.
What Exactly is Changing with the Levy?
The reforms to the sugar tax are twofold, targeting both the sugar threshold and the range of drinks covered.
Firstly, the government will reduce the lower threshold at which the levy applies. Currently, drinks with 5g of total sugars per 100ml are taxed. This will be lowered to 4.5g of total sugars per 100ml, meaning more beverages will fall into the taxable category.
Secondly, and more notably, the exemption for milk-based drinks with added sugar will be removed. This change will affect pre-packaged milkshakes, flavoured milk, and ready-to-drink milky coffees sold in supermarkets. To account for the natural sugars found in milk, a 'lactose allowance' will be introduced, ensuring only added sugars are targeted.
Impact on Plant-Based and Milk Substitute Drinks
The tax expansion also includes milk substitute drinks, such as those made from almonds, oats, or soy. The exemption for these plant-based products with added sugar will be scrapped. However, milk substitute drinks that do not contain added sugar and only contain sugars from their core ingredients, like oats, will remain exempt from the levy.
Announcing the policy, Health Secretary Wes Streeting delivered a powerful statement to MPs, declaring that the government would not look away "as children get unhealthier." He emphasised that obesity hits the poorest hardest and creates a lifelong burden of health problems while costing the NHS billions of pounds each year.
This bold move signals the government's commitment to using fiscal policy as a tool for public health improvement, setting the stage for a shift in the product offerings from beverage manufacturers ahead of the 2028 deadline.
