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UK sugar tax "in line with our expectations" - Coca-Cola European Partners

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Coca-Cola Zero Sugar is enjoying a barnstorming year so far in the UK for Coca-Cola European Partners, the group's head as said, with the country's recently-introduced sugar tax bringing in improved sales in the country.

Coca-Cola Zero Sugar saw its UK sales leap in the second quarter

Coca-Cola Zero Sugar saw its UK sales leap in the second quarter

Yesterday, CCEP reported its results for the first six months of 2018, with sales in the period inching up by 1%. As a result of the arrival of the UK's Soft Drinks Industry Levy (SDIL) in April, the company's sales in the country rose by 6.5% in the half-year.

The SDIL comprises a lower rate levy that applies to added-sugar drinks with a total sugar content of five grams or more per 10cl and a higher rate for drinks with eight grams or more per 10cl.

Speaking after the results announcement, CEO Damian Gammell flagged a 50% year-on-year leap in UK sales of Coca-Cola Zero Sugar in the second quarter, while Coke Classic saw its volumes fall in the period.

"While it's still early days, the impact of the soft drinks tax in GB has so far been broadly in line with our expectations," Gammell said. "Although, it's fair to say that the prolonged period of unusually warm weather in GB has made it difficult to fully assess the impact so far"

Gammell credited CCEP's UK division with having "worked extremely hard to introduce an unprecedented number of reformulations and pack changes ahead of the tax introduction".

Stripping out the sugar tax, the UK posted a sales dip in Q2 of 1%.

The group used the conference call to report that the "customer conflict" that had proved problematic in France - half-year sales in the country plunged by 9.5% - had been resolved. "We will now need to build back on-shelf presence over the next weeks and months in that market," added CFO Manik Jhangiani.

How the sugar tax has transformed the soft drinks category - Click here for a just-drinks comment


Sectors: Company results, Soft drinks, Water

Companies: Coke

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