Coca-Cola Co has spoken out against British Chancellor of the Exchequer George Osborne’s sugar tax and warned that the levy will not reduce obesity.
The surprise budget measure is set to launch in April 2018, and is to put up the price of drinks which contain at least 5g of sugar per 100ml — such as Red Bull, Capri Sun, Sprite and several versions of cola. Drinks with 8g of sugar per 100ml or more are to face a higher rate of tax.
“We don’t believe the sugar tax is the right thing to be done. We are not debating the issue, we are debating the solution. The facts don’t suggest that a sugar tax works to change behavior,” Coca-Cola UK vice president Leendert den Hollander said. “We know this is one of the mechanics and solutions that people think will help deal with the issue of obesity, at least from a government perspective but there is no evidence to suggest that this will reduce obesity.”
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The British Treasury has not decided how much more producers would have to charge for heavily sweetened drinks but health campaigners want it to be 20 percent.
The announcement of the tax hit shares in soft drinks companies, including AG Barr PLC, the maker of Irn Bru; Nichols PLC, the maker of Vimto; and Britvic PLC, which makes and distributes Pepsi in Britain.
Speaking at the Retail Week Live conference in London, Den Hollander declined to comment on whether Coca-Cola’s sales were likely to be affected.
However, he said the company’s entire innovations budget last year had been invested in low or no-calorie drinks, although half the company’s sales come from its traditional full sugar product.
“We are taking action and there is more we can do but we are looking for more proven fact based solution than the sugar tax,” he said.
“If the objective is to reduce calorie intake on a daily basis then the example in Mexico show it doesn’t work,” he added, citing the example of a similar tax in Mexico.
Den Hollander said Mexico’s tax on sugar drinks, introduced in 2014, had only reduced average intake by six calories a day.
However, sales in Mexico have fallen 12 percent since it imposed a 10 percent surcharge on soft drinks in 2014.
Den Hollander’s comments were echoed by AG Barr and Britvic chief executive officer Roger White.
“It is extremely disappointing that soft drinks have been singled out given it is the only food and drink category to have made any real progress in reducing sugar intake in recent years, down 13.6 per cent since 2012,” White said.
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