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Fizzy drinks maker bitter over sugar tax

Sep 27 2016 21:17

London - Soft drinks giant AG Barr, maker of Scotland's famous Irn-Bru fizzy drink, slammed the British government on Tuesday over its proposed sugar tax against obesity, as it reported falling sales.

Barr - whose brands include carbonated drink Tizer and Rubicon juices - said there had been a move towards sugar-free drinks in the face of "negative media coverage" of the sector.

"We believe this proposed tax is a punitive and unnecessary distortion to competition in the UK market which will be very complex, expensive and difficult to implement," the company said as it announced a drop in sales.

British Prime Minister Theresa May last month released proposals for the sugar tax as part of her Conservative government's strategy to combat childhood obesity.

The strategy document argued that children in Britain were consuming way too many calories and too much sugar, placing them at risk from tooth decay, weight gain and type 2 diabetes.

The sugar levy was first unveiled in March by George Osborne, when he was finance minister under the administration of May's predecessor David Cameron.

Only a handful of countries such as South Africa, France and Mexico are touting such a tax.

Scotland-based Barr, which is participating in the proposed levy's consultation phase, added: "We believe our positive actions and sugar reduction progress, along with those of many of our competitors within the soft drinks industry, make the implementation of a soft drinks only sugar tax an unnecessary measure in the context of government health policy objectives."

The tax on drinks with more than five grammes of sugar per 100 millilitres will be introduced in two years, as Britain battles some of the worst obesity rates in Europe.

However, the levy has sparked widespread condemnation from the drinks industry.

Barr added on Tuesday that sales slid 3.6% to £125.6m ($163m, R2.2bn) in the six months to July 30, compared with a year earlier.

"While maintaining overall market share we have seen the impact of changing consumer preferences across our portfolio," the company added.

"In line with general market trends, lower and no sugar products have performed better as consumers respond to the significant weight of negative media coverage pointed towards added sugar products particularly in the last six months."

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