UK government reviews sugar tax extension to milk-based drinks

UK – The UK government is considering extending the Soft Drinks Industry Levy (SDIL) to include milk-based drinks, which are currently exempt. 

This move could bring sugary milkshakes, dairy drinks, and ready-to-drink (RTD) coffees under the levy. 

The SDIL, introduced in 2018, has been credited with reducing sugar intake and encouraging product reformulation, but milk-based beverages have so far avoided the tax if they contain at least 75% milk.

This exemption was originally put in place to avoid disincentivizing calcium consumption, particularly among young people.

Milk-based drinks were excluded from the SDIL because they were seen as a source of essential nutrients, including calcium, which is vital for bone health, especially for children and adolescents. 

However, these drinks can also contain significant amounts of sugar, raising concerns about their potential contribution to unhealthy sugar consumption. 

The UK government has noted that young people only get about 3.5% of their daily calcium intake from milk-based drinks, suggesting that the health benefits of these drinks may not outweigh the potential harms from excessive sugar intake.

As part of the review, the government is also considering whether to adjust the existing sugar content thresholds for the levy. 

Currently, drinks with 5g of sugar per 100ml or more pay a lower rate of 18p per liter, while those with 8g of sugar per 100ml or more are taxed at a higher rate of 24p per liter. 

The government is evaluating whether the 5g threshold should be lowered to further reduce sugar consumption, or if a higher band should be introduced to specifically target the most sugary drinks (those containing 10g or more of sugar per 100ml).

Dr. Kawther Hashem, Head of Research and Impact at Action on Sugar, supports the inclusion of milk-based drinks in the levy. 

She argued that many of these drinks contain high levels of sugar and calories, and removing their exemption could encourage healthier market options. 

She also pointed out that the drinks can be reformulated to contain less sugar, further promoting the shift toward healthier products.

However, the proposal has faced opposition from industry representatives, including Dr. Judith Bryans, Chief Executive of Dairy UK. 

She warned that extending the levy to include milk-based drinks could have unintended consequences for nutritional health. 

Specifically, she emphasized that the naturally occurring sugars in milk, such as lactose, contribute to the overall sugar content but are not considered a public health concern. 

Dr. Bryans and Dairy UK argued that milk-based drinks with more than 75% milk content should remain exempt due to their nutritional benefits.

The UK government is expected to finalize its review by Spring 2025, with any changes potentially taking effect from April 2026. As the debate continues, the future of the SDIL and its potential extension to milk-based drinks remains uncertain.

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