Soft drinks sit at the heart of the UK’s food and drink industry – the country’s largest manufacturing sector. From household names to iconic British brands, our sector contributes £4.78bn to GDP and supports over 54,800 jobs across production and supply chains. If the UK is serious about reigniting growth, politicians must partner with and champion industries such as ours.
That’s why the Treasury’s proposal this week to expand the Soft Drinks Industry Levy (SDIL) by lowering the sugar threshold from 5g to 4g per 100ml sends entirely the wrong message.
Moving the goalposts punishes an industry that has led the way on reformulation, risks undermining years of investment and threatens growth – all for questionable health benefits.
Reformulation success
For more than a decade, the soft drinks industry has been ahead of the curve in giving consumers greater choice: from low & no-sugar alternatives to a wide range of pack sizes.
Many companies made such moves voluntarily, well before the introduction of the SDIL in 2018, due to competition and evolving consumer preferences. As a result of these efforts, and millions of pounds of investment in reformulation, more than seven in 10 soft drinks sold in the UK today are low or no-sugar. Nearly three-quarters of a billion kilograms of sugar were removed from soft drinks between 2015 and 2024.
The proposal to lower the SDIL threshold to 4g comes on the back of a previously announced, backdated 27% increase to the levy, which is a fundamental departure from established tax policy principles. These changes come at a time when producers are grappling with record inflation, National Insurance hikes, spiralling ingredient prices, and looming trade tariffs.
And the pressures don’t stop there. Earlier this year, changes to Packaging Recovery Notes tripled soft drinks producers’ recycling charges – which have already skyrocketed since their inception in 1998.
From last month, extended producer responsibility (EPR) fees hit producers with a fresh bill running into the billions. The timeframe proposed for our members to adapt to the SDIL threshold change also clashes with the 2027 ‘go live’ date for the UK government’s deposit return scheme, in which soft drinks producers are investing hundreds of millions of pounds.
The impact of these major and unprecedented financial headwinds should not be underestimated. Changing the SDIL threshold now simply adds to those costs, undermining the sector’s ability to invest in initiatives such as DRS. It also hinders our capacity to drive economic growth, which is what the government claims it wants to deliver.
The health question
And what will the SDIL threshold change deliver on the health front? The government’s own analysis suggests the move could reduce daily calorie intake by little more than a single calorie in the 19 to 64-year-old age bracket, and just two calories in those aged 11 to 18 years old.
Such a meagre projected change in calorie intake is little surprise. Thanks to reformulation, soft drinks make up just 6.3% of total UK sugar intake. Policies like this one, which overlooks the complexity of decisions about what we eat and drink, are likely to be ineffective.
With the right support, the soft drinks industry can be a British growth success story, creating thousands of new jobs and adding substantially to Britain’s GDP. Government should be doing everything in its power to unlock, not stifle, that growth.
Gavin Partington, director general of the British Soft Drinks Association
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