Rachel Reeves is also planning to lower the threshold to 4g per 100ml, with the changes rumoured to come into effect in April 2027.
Rachel Reeves is planning a change to the sugar tax (Image: Getty)
The Chancellor is reportedly planning a new tax for the Budget later this month. Currently, milk-based drinks are exempt from the tax on sugary drinks, which is 18p per litre of soft drinks with 5g or more of sugar per 100ml. According to reports, however, milk’s days of exemption are numbed.
Rachel Reeves is also planning to lower the threshold to 4g per 100ml, with the changes rumoured to come into effect in April 2027. The soft drinks industry has claimed that these changes will push up prices in supermarkets by 5% and only reduce people’s daily calorie intake by the equivalent of about half a grape. The so-called “sugar tax” (the Soft Drinks Industry Levy) was introduced in 2018 by the Conservative Government in the hopes of reducing childhood obesity.
Sir Mel Stride, the shadow chancellor, said: “If these reports are true, Labour’s new milkshake tax moves the goalposts yet again for an industry that’s already cut sugar and made changes responsibly. It will see businesses that played by the rules punished, with products suddenly dragged into the tax net – all to save Rachel Reeves’s skin.” Until now, milk-based drinks have been exempted from the tax due to fears it could stop children from getting adequate amounts of calcium.
Milkshakes have previously been exempt from the sugar tax (Image: Getty)
But a Treasury spokesman said: “Whilst young people still do not consume the recommended level of calcium, milk-based drinks are not a significant contributor to intakes.
“Milk-based drinks only provide up to 3.5% of calcium intakes for children aged 11 to 18 years, compared with 25% from plain milk, and 38% from cereal products, including fortified white bread.”
Gavin Partington, director general of the British Soft Drinks Association, criticised the changes, saying: “Tightening the Soft Drinks Industry Levy risks undermining years of investment in reformulation for little health gain.
“More than seven in 10 soft drinks sold in the UK are already low or no sugar, and most are now at the limits of what’s technically possible to reformulate.
“Moving the goalposts again, at a time when families are under immense financial pressure, would add £220m in costs and push up shelf prices by as much as 5% – all for a calorie reduction equivalent to half a grape per person each day.
“No meaningful health benefit – just higher prices for shoppers and greater costs for British businesses. It simply isn’t worth it.”
