The dairy industry has welcomed the government’s decision to include a ‘lactose allowance’ in the changes to the Soft Drinks Industry Levy.
The government has today announced that the sugar tax will now include milk-based and milk substitute drinks.
However, after industry feedback, it has introduced a lactose allowance to account for naturally occurring sugars in milk.
The allowance means that the 4.5g of sugar per 100ml limit will not include naturally occurring sugars and means that the “vast majority of lactose present in a milk-based drink will be excluded”.
The industry has long campaigned for a lactose allowance to recognise the health credentials of dairy drinks, such as vitamins, protein, calcium and other minerals.
While it was “disappointing” for milk drinks to be included within the levy, Dairy UK chief executive Dr Judith Bryans welcomed the introduction of a lactose allowance to recognise “the unique composition of dairy”.
“This will ensure that dairy companies do not pay the levy on naturally occurring lactose, as this is not a public health concern,” said Bryans.
“This science-led clarification is a positive step for the entire dairy drinks category and recognises the important nutritional role milk plays,” explained Georgia Lightbody, brand manager Emmi Caffè Latte.
Lightbody added that Emmi had worked with the Provision Trade Federation to lobby the government on this issue and that the result was a “more accurate and fair framework for dairy-based beverages”.
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“This updated framework supports our ongoing efforts to offer products that deliver both great taste and meaningful nutritional value,” said Lightbody. ”We look forward to continuing to work collaboratively with policymakers as the new measures roll out, ensuring dairy drinks can keep innovating and contributing positively to public health goals.”
Bryans added that it was also welcome that the government had increased the sugar threshold and extended the implementation date to 2028.
“This gives dairy companies valuable time to reformulate their products to meet the sugar thresholds,” she said.
Shaken Udder CEO Rob Reames said the government had “listened” to the sector.
“Whilst we may need to make some small tweaks to some of our products, it does mean that we should fall below the threshold across our portfolio by January 2028 without compromising taste or adding any artificial sweeteners,” said Reames.
The majority of the Emmi Caffè Latte range also fell outside of the scope of the levy, said Lightbody.
However, many brands still fall within the scope and are now likely facing reformulations or accepting that tax will impact pricing. Analysis by The Grocer reveals the highest sugar content dairy drinks even when factoring in the lactose allowance.
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