The tax on sugary drinks comes into force in April and the impending deadline has prompted a flurry of activity from manufacturers as some reformulate, some launch new products and some carry on regardless.
by Karen Peattie
Cast your mind back to the government’s Budget two years ago when George Osborne, the chancellor at the time, announced that a tax on sugary soft drinks would be introduced in the UK from April 2018.
The health lobby celebrated, long-time campaigners rejoiced as the chancellor declared the government was committed to tackling rising rates of obesity and type 2 diabetes and high-profile celebrity chef Jamie Oliver was most likely dancing in the streets.
A vocal and robust proponent of the cause, the influential restaurateur’s sugar rush clearly struck a chord with the government and parliament gave the seal of approval to the Soft Drinks Industry Levy on April 25, 2017.
Of course, no-one is against the principle of making food – and soft drinks – healthier and clearly retailers and suppliers in Scotland are keen to work with the Scottish Government to reduce the level of diet-related ill health and the burden this places on the NHS and the economy.
The soft drink manufacturers have been ahead of the game in this respect, reformulating products to reduce their sugar content and introducing new ones in order to give consumers more choice.
Different approaches
John Lee, SGF Head of Policy and Public Affairs, said the approach of manufacturers was interesting, with some reformulating much-loved brands – Irn-Bru, for example – and others steadfastly refusing to alter their recipes. “The industry is cutting its cloth accordingly,” he said.
However, he stressed the SGF remained of the view that improved food education and awareness should be the priority rather than “constantly shifting the responsibility for population health onto retailers”, pointing to the trade association’s Scottish Government-supported Healthy Living Programme in which over 2,000 stores are now participating.
“Independent retailers are doing a great job at promoting healthy products in-store and the efforts of manufacturers to reformulate products and reduce calories shouldn’t go unnoticed either,” he added.
At the Scottish Wholesale Association, Executive Director Kate Salmon also praised suppliers for their efforts in broadening the choice available to consumers in the soft drinks category. “This enables wholesalers to provide a wide range of soft drinks products to their retail and foodservice customers,” she said.
“By offering more low and no-sugar variants, suppliers are ensuring that retailers can provide their own customers with a great choice so they can then make informed decisions for their families.”
The Bru view
With diehard Irn-Bru fans reportedly stockpiling Scotland’s Other National Drink before the original recipe disappears forever and even a petition launched to “save” it, AG Barr is confident that people won’t be able to tell the difference.
The reduction in Irn-Bru’s sugar content from 8.5 teaspoons to four, taking a can from just under 140 calories to about 65 calories, responds to consumer demand for less sugar but the firm’s flagship regular brand still uses the same secret Irn-Bru flavour essence that has given the product its distinct taste since its launch in 1901.
With demand for no and low-sugar options increasing in the New Year, AG Barr is encouraging retailers to ensure that their soft drinks range includes a wide variety of regular, low and zero-sugar variants in order to drive sales.
“The soft drinks market has evolved, with shoppers increasingly looking for greater choice at the fixture,” says Adrian Troy, Marketing Director at AG Barr. “However, they are not prepared to compromise on taste, and are looking for low-calorie alternatives that feature the full-on flavour they’re used to, but with less sugar.”
The AG Barr portfolio includes low and zero-sugar variants of bestselling brands such as Irn-Bru, Rockstar, Rubicon and Snapple. Irn-Bru Sugar Free and no-sugar Irn-Bru Xtra are also performing well in convenience stores.
Drinks will be divided into three bands:
- Exempt rate: Drinks with 5g sugar per 100ml or less
- Lower rate: Drinks with 5 to 8g sugar per 100ml
- Higher rate: Drinks with 8g or more sugar per 100ml
The charge producers will have to pay is:
- 18p per litre for the lower rate
- 24p per litre for drinks in the higher rate
Smaller bottles
Coca-Cola European Partners (CCEP), meanwhile, has gone down the road of using smaller bottles and selling at higher prices rather than altering its famous Coca-Cola recipe.
The supplier has also launched three new Glaceau smartwater sparkling flavoured variants, with zero sugar and natural flavours, while its reformulated regular Capri-Sun flavours, available from early 2018, contain 50% less sugar and fall below the Soft Drinks Industry Levy threshold.
A nationwide sampling campaign to drive consumer trial and support sales of Coca-Cola Zero Sugar saw heavyweight activity across the UK to support retailers by encouraging trial of the popular no-sugar variant. Coca-Cola Zero Sugar is CCEP’s biggest product investment in a decade and part of its strategy to promote choice and help people reduce their sugar and calorie intake.
These include the introduction of new smaller portions like the 250ml can and offering clear nutritional information on packs through the government’s voluntary colour-coded nutrition labelling scheme.
The firm’s Trade Communications Manager, Amy Burgess, added: “It’s important for retailers to offer a wide selection of low or zero-sugar drinks, with manufacturers innovating new lighter options to meet rising consumer demand for healthier options.” In 2018, she said, there would be a continued focus from CCEP on the innovation of lower or zero-calorie products to cater for increasing consumer demand, following on from the successful launch of Coca-Cola Zero Sugar in summer 2016.
Healthier choices
Just last month, Britvic launched its new sustainable business programme called A Healthier Everyday which builds on its commitment to help consumers make healthier choices, support the wellbeing of communities, and minimise its impact on the planet.
This programme builds on Britvic’s work on public health which has seen it take steps to help consumers make healthier choices through a long term and extensive reformulation programme, an innovation pipeline focused on healthier products, and marketing responsibly.
Indeed, this work has seen Britvic remove over 20 billion calories from its GB portfolio since 2013 “on an annualised basis, meaning the company is well placed to respond to the Soft Drinks Industry Levy”. Come April, 94% of its owned brands (72% of Britvic’s full GB portfolio) will be below or exempt from the levy.
For the SGF’s John Lee, however, the big question is: what happens next? He pointed to the consultation on the Scottish Government’s new Diet and Obesity Strategy that was launched by Public Health Minister Aileen Campbell last year on the back of the Scottish Healthy Survey which showed most Scots are overweight or obese, leading to increased risk of diabetes, heart disease and cancer.
The consultation, which closed on January 31, will also support the Scottish Government’s Good Food Nation Bill which is expected to be introduced to Holyrood in early 2019.