Soft drinks producers will have until 13 October to respond to the UK governments sugar tax plans

Soft drinks producers will have until 13 October to respond to the UK government's sugar tax plans

The UK government has opened the consultation period for its proposed soft drinks industry levy. 

Earlier this year, the country's Chancellor of the Exchequer announced plans to introduce a sugar tax as part of the 2016 Budget. The consultation period started last week and will run until 13 October. 

The tax will have two bands - one for total sugar content above five grams per 10cl; a second, higher band for drinks with more than eight grams per 10cl. The levy is expected to raise GBP520m (US$680.5m) in the first year - it is scheduled to begin in April 2018.

In the consultation document, the Government recognised some soft drinks producers have been working to reformulate drinks towards low- and no-sugar recipes. "We welcome these actions, but it is clear that we need to go further and faster," the document said. "The new soft drinks industry levy, announced at Budget 2016, creates strong incentives for further soft drinks reformulation. The levy is designed so that, by taking reasonable steps to reduce sugar content, UK producers and importers of soft drinks can pay less or escape the charge altogether."

Hungary, France and Mexico have already introduced taxes on soft drinks. Mexico has maintained a 10% tax on all sugary drinks and as a result, Coca-Cola's bottler in Mexico, Coca-Cola FEMSA, has seen profits fall. In the first year of the levy, soft drinks sales fell by 6%, while a 4% increase in bottled water sales was recorded.

To read the Government's official consultation document or to submit a response, click here.