The UK government has extended the sugar tax on soft drinks to include products like sugary milk-based drinks.

The Soft Drinks Industry Levy (SDIL), introduced in 2018 as part of efforts to tackle obesity, had not covered milk-based and milk-substitute drinks.

In April, the UK government called for a consultation on proposals to widen the sugar tax on soft drinks and include milk-based drinks.

The Government also announced today (25 November) a cut to the threshold of the sugar tax from 5g of sugar per 100ml to 4.5g. The April proposals had included lowering the threshold to 4g.

In a statement today (25 November), the Government confirmed the levy would apply to manufacturers and importers of pre-packaged milk-based beverages and alternative milk drinks with added sugar.

The products include "supermarket milkshakes, flavoured milks, sweetened yoghurt drinks, chocolate milk drinks and ready-to-drink coffees".

The Government said the new 4.5g threshold "means more high-sugar drinks will fall under the levy unless manufacturers reduce sugar".

Lowering the threshold to 4.5g instead of the originally proposed 4g, it added "strikes the appropriate balance between supporting health objectives and fostering conditions that allow the soft drink industry to continue to grow and invest".

So-called open-cup milkshakes made and sold in cafes and bars will not be affected by the tax, nor will plain cow's milk or other milk drinks free from added sugar. Milk alternatives without added sugar are also exempt.

Businesses have until January 2028 to lower sugar quantities in their drinks.

The Food and Drink Federation reacted positively to the news. "We’re pleased the government has listened to industry and decided to make the changes to the Soft Drinks Industry Levy that it announced today," a spokesperson said.

"The new proposals take into account the costly and technically complex work that companies have to do to bring healthier products to market, and go some way to protecting the investment companies are making to help people follow healthier diets.

The British Soft Drinks Association also responded positively, noting it was pleased the government had decided to not lower the tax threshold to 4g.

"While this move will create an additional cost burden for industry, including our SME members, we take comfort from the fact that a Government which describes itself as pro-growth has elected not to pursue its original goal of lowering the threshold to 4g per 100ml, which would have been technically challenging for industry," BSDA director general Gavin Partington said.

The move has also been praised by health advocacy groups.

Katharine Jenner, executive director at Obesity Health Alliance, said: “Ending the exemption for sugary milkshakes and bringing more sugary soft drinks into the levy is a sensible and long-overdue step to protect children’s health - especially their teeth. 

"The Soft Drinks Industry Levy has already removed billions of teaspoons of sugar from the nation’s diet without harming industry growth, proving that clear, consistent rules are effective."

Dr Charmaine Griffiths, chief executive of The British Heart Foundation, added: “The more sugar cut from drinks on supermarket shelves, the better, so extending the levy to include sugary milk-based drinks is the right thing to do.

"The current levy has been extremely effective at incentivising manufacturers to reduce sugar levels in soft drinks, and evidence has shown free sugar consumption in children and adults has decreased."