“Mandatory measures work”: UK sugar tax on soft drinks smashes target

23 Sep 2019 --- The Soft Drink Industry Levy (SDIL), which came into effect in April 2018, has led to a sugar reduction in beverages of nearly a third, thoroughly beating the initial 20 percent target. This is according to the second-year report from Public Health England (PHE) that also shows that within the food sector, a reduction of just 2.9 percent was achieved. This highlights the efficacy of monetary incentives, with organizations including The Association of UK Dietitians (BDA) and Sustain’s Children’s Food Campaign calling for the government to roll out wider mandatory guidelines.

“The presence of a regulatory incentive, in the form of the soft drinks industry levy, must be the key factor why soft drinks have reduced sugar so dramatically compared to other categories. From its initial announcement in 2016, we started to see a much faster pace of reformulation as companies scrambled to get their drinks into the lower tax category or out of the levy altogether,” Barbara Crowther, Coordinator, Children’s Food Campaign, tells NutritionInsight. 

In contrast to the anticlimactic results in the food sector, SDIL resulted in a 28.8 percent sugar reduction in retailer own-brand and manufacturer-branded products and a 27.2 percent reduction per 100ml for drinks consumed out of home between 2015 and 2018. The amount of sugar purchased in soft drinks also decreased in all socio-economic groups, showing a consumer shift toward zero or lower sugar products. 

Overall, 30,133 metric tons of sugar were removed without reducing soft drink sales, resulting in around 37.5 billion fewer kilocalories sold in sugary drinks each year.

Comparison of sugary drink sales between Baseline (2015) and Year 2 (2018). (Source: PHE)Holly Gabriel, Registered Nutritionist at Action on Sugar, adds that mandatory measures ensure much greater reformulation success in the food and drink industry. “The lack of enforcement and monitoring provides little incentive for companies to engage with the reformulation process. The implementation of SDIL demonstrated that when properly motivated, the food industry can be encouraged to reformulate products to reduce sugar and provide healthier options to consumers.”

Another likely reason for the success of SDIL is the ease of reformulation in drinks. “In products such as cakes or chocolate, sugar interacts with other ingredients, most notably fats. Therefore recipe changes can be more complex, and take longer to adapt.” 

“We have repeatedly pointed out that PHE set hugely aspirational targets and that these could never be met across all categories in the ambitious timeframe given. What it does highlight is that the challenges of sugar reduction vary greatly from category-to-category. Everyone is playing their part, and we’ve already seen lots of great innovation since then, with plenty more in the pipeline,” says Tim Rycroft, Chief Operating Officer at the Food and Drink Federation. 

Building on the success
In light of the report, the Children’s Food Campaign is now calling for further action, including an extension of SDIL to include milk-based sugary drinks. “The exemption of milk-based soft drinks means there is a perverse situation in which milkshakes containing a lot more sugar than fizzy drinks are not taxed at all. The government has pledged to examine the evidence of progress in voluntary sugar reduction, and if it is not sufficient, to consider extending the levy,” explains Crowther. 

Gabriel adds that fat is a bigger contributor to calories in the diet than sugar. “Therefore it is essential that manufacturers are encouraged to reduce both in order to tackle the UK’s unhealthy eating habits and excessive calorie intake.”

“Sugar has been focused on at the expense of saturated fat and calories – and both need to be addressed. Gram for gram fat contributes more calories to food than sugar, and therefore, it is essential that manufacturers are encouraged to reduce both in order to reduce obesity. It is important to remember however that sugar consumption, especially from sugar-sweetened beverages, has a negative impact on dental health. Reducing sugar consumption reduces not only energy intake but also has a profound impact on oral health outcomes,” she continues.The percentage of sugar reduction in soft drinks between 2015 and 2018 by manufacturer and retailer. (Source: PHE)

In light of British Chancellor of the Exchequer Sajid Javid’s notable omission of the sugar tax in his first Spending Review after being appointed, the Children’s Food Campaign is also asking for a guarantee of the continuation of SDIL, as well as reviewing the rate that the levy is set. Crowther argues it should be increased in line with inflation. “Both alcohol and tobacco duties are uprated in this way each year, so would not be unusual as a policy.” 

She also notes that the government should examine the evidence of the threshold at which the levy is charged. At present, drinks with less than 5g are exempt, and evidence suggests many companies reformulated drinks to just below 5g to escape the levy. “However, there is still further reformulation possible – so considering reducing the lower threshold to 4g or 4.5g might trigger the next wave of sugar reduction.”

Additionally, the BDA hopes that “the government will consider whether a compulsory approach in other food and drink categories could drive much faster change. Reformulation is one of a number of ways that government needs to act to support consumers to make healthier food choices.”

“What we know is that SDIL is doing its job so far. It has removed millions of metric tons of sugar from soft drinks through reformulation and appears to be driving consumer purchasing shifts to healthier options. It is also raising an estimated £340 million (US$423 million) in levy income each year that should be being invested in children’s health and nutrition programs. However, sugar sales are still rising overall. Ultimately, we need healthy food to be more accessible, affordable and appealing than unhealthy food, and there’s still a long way to go to achieve that,” concludes Crowther.

Part two of NutritionInsight’s coverage of PHE’s sugar report examines the food sector’s voluntary target of reducing sugar by 20 percent by 2020.

By Katherine Durrell