Under the proposals, which are set to come into effect in 2018, drinks containing more than 8g or sugar per 100ml will face a charge of 24p per litre, while products with between 5g and 8g of sugar per 100ml will see a tax of 18p. This means drinks such as regular Coca-Cola, Irn-Bru and Red Bull, would see a charge of 8p added to the price of a standard 330ml can, while other high sugar drinks, such as fruit juice, would be exempt.
Many soft drinks producers have hit out against this levy, which was a surprise addition to the Chancellor's Budget speech.
Gavin Partington, director general of the British Soft Drinks Association (BDSA), said: “We are extremely disappointed by the Government’s decision to hit the only category in the food and drink sector which has consistently reduced sugar intake in recent years – down 13.6% since 2012.
“We are the only category with an ambitious plan for the years ahead - in 2015 we agreed a calorie reduction goal of 20% by 2020.
“By contrast sugar and calorie intake from all other major take home food categories is increasing – which makes the targeting of soft drinks simply absurd.”
Partington has also said the industry needs clarification about how the tax will work and “exactly what is included and what’s not”.
Jon Woods, general manager of Cocoa-Cola Great Britain, said: “It is disappointing that the Government has chosen to single out soft drinks in its attempt to tackle the problem. If the aim is to reduce obesity, this levy flies in the face of evidence from around the world which shows taxes do very little, if anything to reduce sugar and calorie intake or obesity levels but to add to people’s cost of living.”
Companies such as Coca-Cola, AG Barr and Britvic are believed to be considering a legal challenge to the new law, according to media reports. The legal challenge would argue through the European courts that the tax is discriminatory because it excludes beverages that have a higher sugar content, such as fruit juices and milk shakes.