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Sugar tax on soft drinks 'massive opportunity' for criminal gangs

Published 13/10/2016

The proposed soft drinks levy is central to the Government's childhood obesity strategy and comes into force from 2018
The proposed soft drinks levy is central to the Government's childhood obesity strategy and comes into force from 2018

A sugar tax on soft drinks risks fuelling illegal trade into the UK, suppliers have claimed.

A coalition of businesses under the banner Face The Facts, Can The Tax is calling on the Government to scrap the tax as the consultation on the levy comes to a close.

It believes the prospect of a minimum tax threshold for importers would permit some products to be imported tax free into the UK and "effectively incentivise rogue traders to purchase directly from other countries rather than buy taxed products manufactured in the UK".

The proposed levy on drinks such as Coca-Cola, Pepsi and Red Bull is central to the Government's childhood obesity strategy and will come into force from 2018.

Drinks with 5g of sugar per 100ml will face a lower rate of tax while those with more than 8g per 100ml will face a higher rate, under plans unveiled by then Chancellor George Osborne as part of the Budget in March.

James Bielby of the Federation of Wholesale Distributors said: "The sugar tax will increase the number of imports brought into the UK.

"As the tax will not be collected at point of entry there is a massive opportunity for organised criminal gangs to exploit the tax and flood the market with imported product.

"Soft drinks in other countries often have higher sugar content so there will be a double whammy for the Government - more sugary soft drinks could be available but no levy collected."

British Soft Drinks Association director general Gavin Partington said: "We know from the evidence around the world where they've tried a tax that it will not make a difference to levels of obesity.

"What it will do is damage thousands of UK businesses across the entire soft drinks supply chain, from farmers, to manufacturers, convenience stores and the pub and restaurant trade.

"At a time of economic uncertainty the Government needs to be supporting these businesses and working with industry to support actions that are already making a difference, including reformulation, smaller packs and more marketing of the many no-sugar options now available.

"This demands investment and the soft drinks tax puts that at risk."

Malcolm Clark, co-ordinator of the Children's Food Campaign, said: "This is a ridiculous and unsubstantiated scare story from the sugary drinks industry. They have lost the public health, political and moral arguments. They are now having to fall back on the discredited and failed tactics of tobacco companies.

"Coca-Cola and others have already spent mega-bucks specifically trying to block the soft drinks industry levy - a core component of the Government's Childhood Obesity Plan. Politicians and the public will realise that we are seeing a last-ditch attempt by the food and drink industry to protect their short-term profits at the expense of children's health and the NHS budget."

A Treasury spokesman said: " This week the World Health Organisation joined a chorus of respected voices calling for taxes to help reverse the rise in global obesity caused by sugary drinks, and producers like Britvic are already reformulating their products.

"The vast majority of sugary soft drinks consumed in the UK are made in the UK. The levy will apply to imports the same as UK-made drinks and just as with any tax, HMRC will have a range of powers to enforce it including seizure of goods, fines and criminal penalties."

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