Soft drink firms hit back at UK sugar tax plans

Britain's soft drinks industry hit back at government plans to introduce a tax on sugary beverages, saying it would do nothing to reduce obesity rates.

Major producers such as Coca Cola, and the industry's lobby group, said similar schemes had been tried in other countries, such as Mexico, and had failed.

Britain's surprise tax, to be introduced in two years, was announced by Finance Minister George Osborne in his Budget on Wednesday. He intends to raise £520m and use the cash to fund school sports. However, many saw it as a populist move designed to appeal to voters when Osborne challenges for the leadership of the Conservative Party.

“We believe and acknowledge and understand the issues around obesity and we have worked for a long time to try and address [this] as an industry and as a company,” Coca-Cola’s UK chief, Leendert den Hollander told a retail industry event.

“Still, there’s clearly more that can be done. If we are truly after behavioural change there’s no evidence in the world that it is actually coming from sugar tax so we are not debating the issue we are debating the solution,” he added.

“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.”

However, a study published in the British Medical Journal in January said a 10% sugar tax on fizzy drinks introduced in Mexico two years ago cut sales by 12% in its first year, and up to 17% in the poorest households, adding that the average person bought 4.3 litres fewer of sugary drinks.

Diabetes in Mexico, based on hospital admissions, is the highest in the OECD, and ischemic heart disease and diabetes were the two leading causes of mortality in Mexico, the study found in its exploratory research.

"Concomitant with the rise in obesity and diabetes in Mexico are large increases in the consumption of sugar sweetened beverages –Mexico had the largest per capita (163 liters) intake of soft drinks in 2011," the study noted.

The British Soft Drinks Association (BSDA) also disagreed with the introduction of the tax.

BSDA Director General Gavin Partington said: “Evidence from other countries has shown this type of tax does not work. In fact, the soft drinks tax in Mexico has reduced average calorie intake by 6 calories per person, per day with no evidence that it has reduced levels of obesity," he said.