Drinks manufacturers and suppliers have expressed strong opposition to the government’s plans to introduce a sugar tax on drinks next year, claiming it will have little or no effect in tackling obesity.
Representatives of the drinks industry claim that the proposed sugar-sweetened drinks (SSD) tax is discriminatory and will penalise low-income families while also threatening jobs and businesses in the sector. Some manufacturers such as Britvic warned that they would have no choice but to pass on the cost of the tax to consumers.
The warnings were among 30 submissions on the tax that were made to the Department of Finance as part of a consultative process. Plans to press ahead with the SSD tax were confirmed by Michael Noonan, the finance minister, in last year’s budget but its introduction has been delayed until April 2018 to coincide with the launch of a similar tax in the UK.
Mr Noonan said the government was being prudent in aligning the time frame and structure of Irish tax with the UK. “It is of utmost importance to me that such a tax is as effective as possible, as fair as possible, and minimises the administrative burden on business,” he said last October.
The Department of Finance said that the effectiveness of the measure would depend on its scope and the rate set, as well as on the response of the soft drinks industry to reformulating their products. It also said it was not concerned that an Irish SSD tax would encourage cross-border shopping in Northern Ireland, provided that the UK tax was set at a similar level and implemented at a similar time.
The Department of Health has proposed that the tax should apply to all water and juice-based drinks that have 5g or more of added sugar per 100ml. Most soft drinks and energy drinks have between 10g and 11g of added sugar per 100ml.
Figures released last October showed that there were more than 54,000 obese children in Ireland.
Food and Drink Industry Ireland (FDII), a division of Ibec, the employers’ body that represents more than 150 manufacturers and suppliers, said Ireland’s most important indigenous industry did not need a new tax when it was already facing the challenge of Brexit.
It also claimed that scientific evidence of the efficacy of such taxes in changing consumer behaviour and tackling obesity was inconclusive.
The Irish Beverage Council asked the government to include a review and a sunset clause if it pressed ahead with the tax. It said that 70 per cent of the population would be hit with the tax even though obesity was a problem for only 4 per cent of people who consumed sugar-sweetened drinks daily.
Coca-Cola said the tax was fundamentally flawed, and that it penalised a category accounting for only 3 per cent of calorie intake while ignoring other sources of sugar in people’s diets.
The company also warned that the tax would increase imports and encourage cross-border and black market trading, as well as placing a significant financial and administrative burden on manufacturers. It pointed out that it had already reduced the calories and sugar in its portfolio of soft drinks over the last five years by 8 per cent, with reductions of up to 30 per cent in some brands such as Sprite. It was committed to reducing sugar by a further 10 per cent by 2020, it added.
“It is disappointing that the government considers it necessary to impose a very selective regulatory intervention on a specific food and drink category that has already substantially reduced sugar intake from the consumption of its products, while other sources of sugar in the diet are ignored,” a spokesman said.
Lucozade Ribena Suntory Ireland said the tax held the soft drinks industry being solely responsible for obesity and that not drinking soft drinks was regarded as “the magical solution to an extremely complex problem”.
The Royal College of Physicians of Ireland (RCPI) said there was ample research to show that sugar-sweetened drinks were associated with weight gain, type 2 diabetes and poor oral health, but said studies had shown that only taxes raising prices by between 10 and 20 per cent would reduce consumption levels of soft drinks.
The Institute of Public Health welcomed the tax as part of a suite of necessary measures to curb excess sugar consumption.
Several bodies for and against the tax said there was no basis for excluding dairy-based drinks.