Sugar, we’re going down: is the review of the soft drinks industry levy a taste of things to come?

The health secretary has warned he will “steamroll” the food and drink industry by launching a new plan to tackle obesity. In an interview with The Guardian setting out his priorities for the year, he said the move is part of a broader focus on preventing ill health rather than simply treating it. The plan is being worked up across government departments and the sector will soon be invited to feed into a consultation process.

Is this political rhetoric indicative of a heavier-handed approach to public health than under the previous iterations of government? Our gut instinct is yes, but proof of the pudding will be in the government’s response to the Soft Drink Industry Levy (SDIL) review. Launched last October, health and treasury ministers are considering revisions to the existing sugar content thresholds, including increasing the scope to milk-based and milk substitute products, and the levy rates.

Although the SDIL is widely considered to be a successful and effective policy intervention, the UK’s sugar consumption remains significantly above recommended levels, especially among children.  By lowering the sugar thresholds and widening the scope of products, more soft drink producers will be impacted by regulations and will be forced to either reformulate products or see their production costs increase. The review will be completed in the spring with changes enacted in the 2025 Budget, so producers should be closely following policy developments throughout the course of this year. The government’s response to the review will set the mood music for the National Food Strategy so this is a crunch point for all those in the sector, not just soft drinks producers.

Beyond the health merits for cracking down on sugar content, there are political and economic factors at play. Politically, the Prime Minister insists that 2025 is a year of delivery after a slow and difficult start to his tenure. Further state intervention in food and drink markets in the name of public health would play to a large section of the labour backbenchers. Party morale is likely to be put to the test in the coming months as the nation’s economic woes continue. This is where HM Treasury comes into the picture; amid turbulent financial markets and disappointing economic growth, the Comprehensive Spending Review will be an uncomfortable experience for the Chancellor and her team. Raising revenue from the levy could ease some of the pressures that will undoubtedly fall on the schools budget, which the levy supports.

For industry there is a fine balance to strike. Full resistance to public health reform would be counterproductive and leaves a bad taste in the mouths of consumers. Developing and maintaining an open, constructive dialogue with government, including showcasing innovative reformulations, will be a far more effective approach.  Framed in this way, industry will be able to better make the case that a proportionate approach to SDIL and wider reforms will deliver positive health and economic change.

If you would like to discuss the sugar levy and the government’s public health agenda in more detail, please contact GK Associate Director David Mitchell at: david.mitchell@gkstrategy.com