Autumn Budget announcement sees long-awaited expansion of the Soft Drinks Industry Levy to milk-based drinks
Packaged milk-based drinks such as coffees and milkshakes will now be included as part of the Soft Drinks Industry Levy (SDIL), as detailed in the Autumn Budget.
Following the consultation earlier this year, the government also confirmed the threshold at which the SDIL applies will be lowered from 5g to 4.5g of sugar per 100ml. By reducing the threshold and expanding the categories covered, the government aims to further incentivise food and drink companies to reduce added sugar in their products or risk paying the tax.
Originally introduced in 2018 and applying only to soft drinks containing added sugar, the SDIL has already demonstrated a positive impact on sugar reduction and we applaud the government’s commitment to build upon its success - a move we have repeatedly called for in the past and now advocate for as part of the Recipe for Change campaign. High sugar intake, particularly amongst children, increases the risk of tooth decay and obesity, and contributes to a higher chance of developing long term diet-related conditions such as type 2 diabetes, heart disease, and some cancers. Today’s announcement is therefore a vital step in encouraging industry reformulation and increasing availability of healthier products.
Whilst the news has been welcomed across the sector, it is important to note that the government could have gone much further. Specifically in lowering the sugar threshold to 4g instead of 4.5g, as proposed in the consultation earlier this year. With almost three quarters of soft drinks already falling under the 4g threshold, such a reduction would have presented a fantastic opportunity to drive a greater level of reformulation - an opportunity the government unfortunately have not seized.
Manufacturers have been given until 1st January 2028 to comply with these changes, after which failure to do so will result in the tax being imposed.
Commenting on the news, Dr Kawther Hashem, Senior Lecturer in Public Health Nutrition and Head of Research and Impact at Action on Salt and Sugar quoted:
“We welcome today’s announcement and are pleased to see further progress on tackling excessive sugar consumption. Lowering the threshold from 5g to 4.5g per 100ml is a positive step, and expanding the levy to include milk-based drinks is particularly important. Some milkshakes still contain more sugar than a can of full sugar cola yet have been allowed to sit outside a levy specifically designed to reduce high sugar content. Closing this loophole finally ensures that all high-sugar drinks are treated consistently, regardless of their ingredients.
However, we had hoped the Government would go further. The consultation explored reducing the minimum sugar threshold to 4g, so it’s unclear why this has now risen to 4.5g. Our own submission showed a median sugar content of 4.2g/100ml in soft drinks. We found nearly three-quarters of drinks already fall below 4g/100ml, so today’s decision misses an opportunity to drive further meaningful reformulation. We also called on the Government to create a new upper tier for drinks exceeding 10g of sugar per 100ml, targeting the major brands that have refused to reduce sugar in their high sugar drinks. This would have prevented companies that choose not to reformulate from gaining an unfair advantage over those actively investing in sugar reduction.
We know the levy works and when the rules are clear and consistent, manufacturers act fast. The Soft Drinks Industry Levy has already taken billions of teaspoons of sugar out of the UK diet without holding back industry growth. Today’s move builds on that progress, but if we’re truly committed to improving the nation’s health, and the nation’s teeth, we’ll need to be even more ambitious.”
Read the full announcement on the government website.
Learn more about the Soft Drinks Industry Levy.
