Australian soft drink producers will be celebrating the end of a levy on domestic sugar sales, after the Treasury announced it would be abolished from 1 December.

The move comes a year earlier than planned after improved global pricing helped alleviate issues for Australian sugar growers.

Treasurer Peter Costello said: "The levy was introduced at a time when sugar prices were low, to fund an exit and restructuring package for growers.

"The marked improvement in world sugar prices since 2003 has meant that input costs have risen for users."

The news was welcomed by Coca-Cola Amatil (CCA), the Australian soft drinks producer, whose CEO Terry Davis said: "It was a severe tax on our business, and came at a time when we're paying world record prices for sugar, aluminium and PET resin."

CCA estimated that the levy had cost the company A$9m (US$7m).

Costello believed the end of the levy would save businesses and consumers about A$28m a year.