UK sugar tax takes fizz out of shares in soft-drinks firms

UK Chancellor of the Exchequer, George Osborne, took aim at the soft drinks industry yesterday, announcing a new tax on sugary drinks.

Investors immediately dumped UK beverages: Irn Bru-maker, AG Barr, and Tango seller, Britvic, both fell more than 5%, sugar and sweetener producer, Tate & Lyle, suffered a similar hit, while Associated British Foods also fell.

But there are reasons to think this bitter pill will be an easier one to swallow than initially thought: The tax doesn’t take effect until 2018, so beverage producers have time to decide how to respond.