Sugar Tax Forces Coke Downsize

January 16, 2018 Taxation in UK

Coke taxLONDON – The UK’s upcoming sugar tax will see Coca-Cola downsize their drinks, hoping to mitigate the impact of the tax on consumers and their own bottom line.

The UK arm of Coca-Cola has announced that it will be downsizing the size of its drinks, as a direct response to the extra tax to be levied on the sale of sugary drinks in the UK.

From April this year, all sugar-sweetened beverages sold in the UK will be subject to a tax of GBP 0.18 per litre, if the drink has more than 5g of sugar per 100ml, while drinks with more than 8g of sugar will face a tax of GBP 0.24 per litre.

The government hopes that the tax will lead to total tax collections of GBP 520 million per year, with the funds already earmarked to pay for sports programs in public schools.

Coca-Cola have stated that they do not plan to alter the recipe of the drink in order to bypass the tax, and, instead, intend to reduce the size of a standard Coca-Cola bottle from 1.75 litres to a lower 1.5 litres while also raising the price by GBP 0.20.

Coca-Cola has been in talks with wholesales about the changes that need should be implemented prior to the tax’s implementation, such as packaging, pricing, and sizing, however, they note that they cannot control the full impact of the tax when it reaches the consumers.

If no changes are implemented at all, traditional sugar-sweetened beverages will be priced higher than their low-sugar or sugar alternative drinks.