Soft drinks industry gives reasons for opposing proposed sugar tax

The soft drinks industry has hit out at a possible sugar tax saying it will not have the expected health benefits.

The Irish Beverage Council say it would also increase the average annual grocery bill by €60.

The Government is considering a sugar tax in the budget as part of an effort to tackle obesity.

However the industry lobby group claim that there is no proof that the tax would reduce sugar consumption.

The IBC director Kevin McPartlan, however, said while he accepted industry had a crucial role to play in tackling the obesity problem, a sugar tax would not work.

“We know from other countries that it doesn’t reduce demand for the product. What it will do is encourage cross-border trade which will cost the industry sales and cost the exchequer in terms of Vat on those lost sales,” he said.

The IBC says its members, which include industry heavyweights such as Britvic Ireland and Coca Cola Ireland and which between them directly employ 3,500 people, could lose €60m a year to cross-border buying.

In a submission to Mr Noonan, it says: “It cannot safely be assumed that such losses will not threaten employment or potential future investment here.”

It also says the resulting loss of Vat receipts to the exchequer would be €35m, and that the average household’s annual grocery bill would rise by €60.

It proposes instead that manufacturers be encouraged to continue their policy of “reformulation”.