The Soft Drinks Industry Levy is to be extended to cover hundreds more soft drinks – as well as milkshakes and dairy-based drinks – as part of the government’s plans to tackle obesity.
Health secretary Wes Streeting has confirmed today (25 November) that the threshold at which the SDIL starts to apply will be moved from 5g of sugar per 100ml to 4.5g per 100ml.
“Obesity robs children of the best possible start in life,” Streeting told MPs in the House of Commons. “It hits the poorest hardest – sets them up for a lifetime of problems.”
The levy will also be expanded to include milkshakes and pre-packaged coffees such as lattes and cappuccinos, although there will be a ‘lactose allowance’ to account for the naturally occurring sugars in milk.
Milk drinks were exempted from the original levy on the basis of protecting the calcium intake of children. However, this loophole is now set to be closed.
Changes will come into force on 1 January 2028, giving suppliers time to reformulate their products.
Introduced in 2018, the SDIL was widely credited with slashing sugar in soft drinks by 34.3% by 2020 against a 2015 baseline.
However, many major brands and suppliers – including Pepsi, Fanta, Lucozade and 7up – have reformulated their products to below the 5g/100ml threshold.
New threshold explained
The decision to set the levy at 4.5g per 100ml, as opposed to the 4g per 100ml threshold previously mooted, struck “the appropriate balance between supporting health objectives and fostering conditions that allow the soft drink industry to continue to grow and invest”, the government said.
Some 645 soft drinks products in the UK contained between 4.5g and 5g of sugar per 100ml, according to government analysis undertaken in 2020. They made up 11.5% of all soft drinks sales by value in the 52 weeks to 6 September 2020 [Wordpanel by Numerator].
The 4.5g/100ml threshold also aligns with the government’s nutrient profiling model, which defines products with more than 4.5g/100ml as HFSS.
Setting the levy threshold in line with HFSS advertising rules was “a sensible move” that would give the industry “one consistent benchmark,” said Barbara Crowther, children’s food campaign manager at Sustain.
“Companies who’ve already reduced sugar will now be rewarded for acting responsibly, whilst those still stacking excess sugar into milkshakes will now have a clear choice: change their recipe or pay for the health harm caused,” Crowther added.
Read more:
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What will new sugar tax thresholds mean for drinks suppliers?
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Why inclusion in the SDIL risks dairy drinks’ growth turning sour
The announcement arrives with Chancellor Rachel Reeves preparing to present the budget to Parliament tomorrow (26 November).
Reeves is expected to announce a number of measures to boost Treasury coffers as she looks to fill a £22bn “black hole” in the nation’s finances.
Changes to the SDIL will bring an additional £40m-45m in annual tax receipts from January 2028, according to government forecasts.
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