The industry group representing Irish beverage firms has called on Finance Minister Michael Noonan to significantly delay, or totally scrap plans to impose a tax on sweetened drinks in his October budget, as the UK government yesterday formally spelled out its plans for a sugar tax.
Under its plans, the UK will levy a tax on drinks with a total sugar content above 5 grams per 100ml, with a higher band for even more sugary drinks.
The UK government’s health department says sugary drinks are the single biggest source of sugar for children, and a child can have more than their recommended daily intake just by drinking a can of cola which contains nine teaspoons of sugar.
It wants the industry to work towards a 20% cut in products popular with children. Progress would be reviewed every six months by the UK government’s health agency.
However, Kevin McPartlan, director of the Irish Beverage Council, said a commitment by the Government here to introduce a similar sugar tax should be scrapped.
“They need to can this idea but they insist it is important that they do not do it before the UK,” he said.
Tax documents published by the Department of Finance last month noted the commitment made by the Government to introduce a tax on sugar-sweetened drinks, on public health grounds, to help reduce obesity.
It estimated around 60% of 685.5m litres of all soft drinks, which also include bottled water and juices, sold in stores were sweetened, while a tax of five cent on a can of sugar-sweetened drink could raise €50.7m.
Mr McPartlan said the proposed tax would make little contribution to health, while manufacturers and retailers would lose considerable amounts of revenue if the tax were introduced swiftly in the Republic before any introduction in the North.
Following the UK announcement, the Irish industry group also wants the Government to disclose more details of any proposals for sugar taxes at an early stage. In its tax documents, the Finance Department said France, Hungary, Finland and Belgium levy their versions of the sugar tax on the basis of volume and not on retail price.
The documents said France levies its tax on sweeteners, energy and diet drinks.
Finland originally also had a tax on sweets and ice creams but was forced to abandon the levy on the two products, while retaining the sweetened drinks tax, following a state-aid complaint from the EU.
Hungary has a wide range of sugar taxes, and Denmark for a short while also imposed a saturated fats tax but dropped the levy amid concerns about the effects on cross-border shopping. Mexico has its sugar tax, and “numerous US cities introduced soda taxes”, according to the tax documents.
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