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Soft drink giants threaten legal action over sugar levy

Coca Cola, AG Barr and Britvic have reportedly instructed trade body to “pursue all options” as it looks to battle Osborne’s incoming sugar tax

GEORGE OSBORNE’S sugar tax has suffered a blow after soft drink companies revealed plans to launch a legal challenge against the levy.

International drinks companies Coca Cola, Britvic and AG Barr have reportedly told the British Soft Drinks Association (BSDA) to look into every aspect of the levy, as they consider whether to challenge the tax or not.

The chancellor used last week’s Budget to tackle the UK’s growing childhood obesity crisis by declaring that from April 2018, soft drinks companies will pay a levy on all drinks that contain added sugar. Osborne failed to specify the rate of the levy – which will be applied to drinks containing more than 5g of sugar per 100ml and 8g of sugar per 100ml – but claimed that it would raise £520m a year.

Following the Budget, the BSDA’s director general Gavin Partington said that he was “extremely disappointed” with the government’s decision, claiming that the food and drink sector had already decreased its sugar content in its products, down 13.6% since 2012.

The BSDA also used an Office for Budget Responsibility report to highlight the fallibility in the tax, with the OBR indicating that the tax will cost £1bn over the next two years rather than be a revenue raiser for the Conservatives.

A BSDA spokesperson commented on the situation: “At this stage all options are on the table. We need clarification about how this tax is going to work, exactly what’s excluded and what’s not. Nothing can be ruled out at this stage.”

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