The sugar tax
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Words: Caitrina Cody   Illustration by Ellis Van Der Does

The sugar tax

Officially known as the Soft Drinks Industry Levy

 
Irn-Bru drinkers are, for the most part, Scottish and clearly not afraid of sugar. For anyone who didn’t already know that, last year’s Hands Off Our Irn-Bru campaign, protesting a decision to lower the massive amounts of sugar in the fluorescently fizzy orange concoction, shows just how far they’ll go for a collective sweet tooth.
 
The Hands Off petition gathered a respectable 53,000 signatures and demanded that the manufacturer, A.G. Barr, stick with their tried and tested formula in the face of government pressure:
 
“IRN BRU is a national treasure in Scotland and really is part of our culture with its unique taste, branding and marketing.”
An ambitious claim, but the campaign was doomed. The government pressure was no passing fad and Irn-Bru began adapting its ingredients in early 2018, along with Ribena and Lucozade and a host of other sugary brands. Those well-timed reformulations meant dodging tax levies, which would have led to either profit losses or a hike in the prices paid by consumers.
 
By replacing sugar with artificial sweeteners, Irn-Bru now has less than 5g of sugar per 100ml, low enough to pass under the tax threshold. Undeterred, die-hard Bru fans are now busy stockpiling supplies of the tooth-meltingly sweet original before it disappears off shelves. Hats off to this never-say-die attitude (except where it leads to type 2 diabetes).
 
Irn-Bru aside, the soft drinks landscape has seen massive upheaval since the introduction of the UK sugar tax in April 2018, ultimately designed to lower rates of obesity in Britain. Officially called the Soft Drinks Industry Levy (SDIL), the tax puts a charge of 24p on drinks containing 8g of sugar per 100ml and 18p a litre on those with 5-8g of sugar per 100ml, directly payable by manufacturers to the British Treasury. Revenue collected will be used to fund physical education and healthy eating campaigns in schools across the country.
 
The tax aims to reduce sugar consumption by encouraging companies to reformulate their high sugar brands and avoid paying the levy. If they don’t reformulate, it’s their choice whether to pass the cost on to consumers (as soft drinks behemoth Coca Cola now does with their regular 375ml cans, which contain around 39g of sugar.)
 
Campaigners had called in vain for such a tax for years, with groups like Action on Sugar and celebrity chef Jamie Oliver leading the charge, and a University of Cambridge study pointing out that 8,000 cases of type 2 diabetes a year were linked to sugary drinks consumption . Those in favour of the tax pointed to the example set by Mexico, where sales of sugary soft drinks had been reduced by six per cent in its first year after the introduction of a similar tax in 2014.
 
The tax came as a blow to manufacturers, pubs, convenience stores and off licences, with spokespeople for the industry claiming that the tax will do nothing to tackle obesity, while putting thousands of jobs at risk and raising prices.
 
In the UK, artificial sweeteners have enabled Irn-Bru and others to avoid raising prices, but medical experts warn that consumers choosing low-sugar drinks laced with aspartame, saccharin or sucralose may end up adding more calories through other sources, therefore cancelling out any health benefits. Extra doughnut with your sugar-free Fanta, anyone?
 
Not every soft drink company has turned to sweeteners to solve their sugar tax problem. Karma Cola is a very different beast to Irn Bru, and indeed to other, larger cola brands, and their response to the sugar tax has been cautiously positive, even as it impacts their profit margins.
 
“We’re always aware of changes in people’s consumption and it’s obvious that having a no or low sugar drink is a good thing,” explains Karma Cola co-founder and CEO Simon Coley.
 
“We’re happy to pay a tax that benefits people but we’re keen to see it work evenly across all sectors responsible for putting those sorts of foods into production.”
In response to changing times, the company has introduced Sugar Free Karma Cola, made with all-natural and ethical ingredients and sweetened with organic plant extract Stevia (instead of “diet-zero-lite artificial crap that tastes as weird as it sounds”, as they call it.)
 
“We worked on our Sugar Free Karma Cola recipe for a long time and make it without any of the horrible sweeteners that have a pretty poor reputation. It’s a good low-calorie choice but ultimately, if you want a sugar-free drink, have water, it’s really refreshing.If you want a soda have one — just don’t overindulge by buying two half-litre bottles of it.”
The original Karma Cola recipe remains the same post-sugar tax, and will continue to sell at the same price, with the company absorbing the cost of the levy. “It’s the jewel in our crown, we wouldn’t want to diminish it. We’ve insisted on staying true to the authentic, organic recipe — it’s the best one we could create, and it simply needs sugar to work, alongside the lime, cinnamon, lemon, spices and cola.”
 
For Karma Cola, reformulation wasn’t an option. “In a good way, we’re stuck with what we started. There was a bit of a knee-jerk response from some brands, but we couldn’t really do that — we have too much confidence in our ingredients and a responsibility towards the people that supply us. It would be impossible to replace with synthetic ingredients and keep our ethical and organic credentials intact.”
 
The company has chosen to look at the tax as a chance to innovate and experiment with their sugar levels. “We’d been testing ourselves on this for a while, but this has encouraged us to go lower with some of our products — Lemony Lemonade and Summer Orangeade for example sit in the lowest band of sugar and still taste great.”
 
Simon believes informed consumers who trust the brand and its ethos will see regular Karma Cola as an occasional treat worth indulging in. “I think it’s ok to indulge in drinks like ours because we’re confident that what we’re doing is a good thing and that we do the best we possibly can for the environment and for the people involved. If you want to have a drink that’s sweet, ours is pretty much as good as it gets, though we don’t expect you to be drinking a lot of it.”
 
Original estimates of potential revenue gains from the tax were £500 million, but now that more than 50% of manufacturers have changed their formulas to avoid the levy (amongst them, our old friend Irn-Bru), that estimate has been drastically reduced to £240 million.
 
Critics have, fairly, pointed out that soft drinks aren’t the only guilty parties in the great sugar battle, and to really combat obesity, taxes should be applied to chocolate, cakes and biscuits as well. That legislation may well be coming down the line here in the UK — Mr Kipling take note.
 
Though many hardcore Irn-Bru fans might disagree, perhaps it’s a good thing that Irn-Bru Bars (chewy, fizzy, bright orange confectionery bars that tasted very strongly of Irn-Bru) went out of production more than 10 years ago.
 
Sources

www.karmacola.co.uk/
www.diabetes.co.uk/nutrition/2018-uk-sugar-tax.html
www.theguardian.com/world/2015/jun/18/mexican-soda-tax-cuts-sales-first-year