Calls for Sugar Tax Pause

Published on: 29 Jul 2016

Sugar Tax Image 1Leading industry figures are calling for a pause on the proposed sugar tax, suggesting that the turmoil of the British market needs to be stabilised first.

With the impact of the Brexit vote still being felt through UK industry, food companies and groups are suggesting that the levy should be put on hold until stronger times.

FDF Speaks Out

The Food and Drink Federation (FDF), a leading group representing business within the UK food industry, has made calls to the government to postpone the sugar levy. The proposed tax will cut into sugary drink profits and force prices up, something that is certainly not needed at a time when the market is already unsteady.

The falling value of the pound against both the dollar and the euro is a huge cause for concern within the food industry, as are current fears of loss of a highly European workforce once the Brexit process goes through.

Ian Wright, the Director General of the FDF, made his stance clear during their 2016 convention. He says that the government has "an obligation to act quickly to support confidence and competitiveness – and to provide reassurance and stability." Of course, this is something he feels would be at odds with the introduction of the sugar tax, along with the proposed Apprenticeship Levy. He adds that "implementation of the proposed Apprenticeship Levy and the Sugar levy – and any other fresh burdens – should both now be put on hold,” calling them “unwelcome burdens on hard-pressed industry at a moment of crisis."

He holds the position that neither levy will be effective, having not been given due diligence in terms of research. In looking at these taxes next to the bigger issues at hand, he feels that it is "inconceivable that the small number of civil servants with expertise in excise duties within HM Revenue and Customs would, at this time, be working on the sugar levy and not the replacement for the [EU] customs union."

Coca-Cola Support

Sugar Tax Image 2 [square]It should come as no surprise that the largest soft drinks manufacturer in the world opposes the tax, but Jon Woods, the head of Coca-Cola UK and Ireland, has added his voice to the protests all the same.

He joined in on the debate at the conference, saying that the tax needs to be shelved instead of being introduced in April 2018 as planned. If it all goes ahead as planned, the levy will coincide with the final motions of the departure of the United Kingdom from the European Union.

“It’s bad for business at a time when we should be freeing our businesses from red tape and bureaucracy,” he says. “A sugar tax won’t reduce obesity because it’s bad policy.”

Woods might be in a good position to know: he claims that companies should be focused on creating lower calorie drinks, not just making them sugar free. He also points to statistics to back up his theory: between 2004 and 2014, though the sales of soft drinks fell by 44%, obesity rates were still on the rise.

Tax for Jobs

So what does this tax mean for jobs? If you work in food sales, you might find that you need to renegotiate supply terms with your clients, raising your prices to match the tax – while manufacturers may see a difficult struggle to prevent the loss of money being taken out of their side of the profits.

If you are interested in working in the food industry, this sugar levy may affect you already. For those who were considering apprenticeships and are now not, consider taking a degree and going for a graduate position.