Sugary soft drink makers hit by UK tax

Chancellor George Osborne has hit sugary soft drinks makers with a tax as part of the Government's strategy to tackle childhood obesity, using the predicted £530m raised to be spent on boosting school sports. This new sugar levy will be implemented in two years time; pure fruit juices and milk will be exempt. However, it is worth noting that recent studies reveal that a 20% tax on soft drinks in the UK would lead to a reduction of only four calories per person per day and the British Soft Drinks Association (BSDA) argues that soft drinks, including low and no calorie and bottled water, are already taxed at the standard VAT rate of 20%. Furthermore, in Mexico the impact of the soft drinks tax has seen only a 6.2 calories per day reduction i.e. 0.2% of the daily diet. The BSDA argues there is no evidence worldwide that such a tax has an effect on obesity, adding that reducing portion sizes, and reformulating products were far more effective.

Osborne is expected to renew his commitment to austerity (Getty Images)

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