Milkshakes and plant-based drinks such as oat and rice beverages could soon face a sugar tax under new UK Government proposals aimed at reducing sugar consumption.
The Treasury launched a consultation on Monday to consider ending the current exemption for dairy-based drinks and non-dairy alternatives under the Soft Drinks Industry Levy (SDIL). The move could also see a reduction in the threshold for sugar content, lowering it from 5g to 4g per 100ml before the tax applies.
First introduced in 2018 as part of a wider anti-obesity campaign, the SDIL initially excluded milk-based drinks due to concerns over children’s calcium intake. However, government data now shows such products contribute only 3.5% to young people’s calcium consumption, prompting a rethink.
The Treasury argues the expansion would encourage manufacturers to continue reducing sugar in their recipes, with 203 pre-packed milk-based drinks — accounting for 93% of sales in the category — potentially affected unless reformulated.
“By bringing milk-based drinks and milk substitute drinks into the SDIL, the Government would introduce a tax incentive for manufacturers to build on existing progress and further reduce sugar in their recipes,” a Treasury spokesperson said.
The Government also claims the current levy has driven widespread change, with 89% of fizzy drinks now avoiding the charge thanks to reformulation.
However, the proposed extension has drawn criticism. Christopher Snowdon of the Institute of Economic Affairs said: “The sugar tax has been such a dramatic failure that it should be repealed, not expanded. Sugar taxes have never worked anywhere. What happened to Starmer’s promise to not raise taxes on working people?”
The consultation is open until 21 July.
