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Sugar tax could face legal challenge for being too hard on soft drinks

Luke Whitmore - Law on the Web

  1. 24 March 2016
  2. Consumers
  3. 0 comments
Junk food

Soft drinks companies are said to be considering bringing a legal challenge against the government over a tax on sugary beverages which is set to be introduced in 2018.

In the Budget last week, George Osborne announced the new policy, under which soft drinks containing more than 5g of sugar per 100ml will be hit with a levy of 18p per litre, while those which have a sugar content over 8g per 100ml will attract a higher rate of 24p per litre. The money raised will be spent on improving sports funding in primary schools.

But while the move met with jubilation from health campaigners, the companies manufacturing such products were unsurprisingly less welcoming.

And there have been a number of reports that legal challenges could be on the horizon.

One potential avenue for appeal is that the tax is only being applied to soft drinks, with pure fruit juices and milk-based drinks being exempt and no action being taken on equally sugar-laden food. If a challenge were taken to the European courts, this could be seen as an unfair bias.

Soft drink companies have claimed that the tax will not work to reduce consumption and instead simply raise the cost of living for the less well-off. They also say that their industry has done more to reduce the amount of sugar in their products than any of the other food and drink sectors.

Other critics have pointed out that the estimated £1bn cost of introducing the tax will cost the government almost twice as much the £520m it is expected to raise within the first year of its existence.

But Chancellor George Osborne has challenged the soft drink industry to “bring it on”.

“We are going to introduce a sugar tax, it's not a threat or a promise, it's the way it's going to be,” he commented.

 “We first of all took legal advice before introducing it and we’re very clear it’s legal and we would of course robustly defend it if there was a legal challenge,” he added. “But I’d say to companies: don’t waste time and money on a legal challenge. Use this period to look at your products and see if you can reformulate.”

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