Soft Drinks Industry Levy (SDIL)

In 2016, the government announced a new levy that would be applied to the production and importation of soft drinks containing added sugar. A primary aim of the levy is to encourage manufacturers to reformulate their products and reduce the sugar content, to contribute to the government's aim of reducing childhood obesity in the UK. Introduced in April 2018 by HM Treasury, covers:

• drinks with sugar added during production, or anything that contains sugar, such as honey
• drinks with at least 5g sugar per 100ml in their ready to drink or diluted form
• drinks that are either ready to drink, or to be drunk it must be diluted with water/mixed with crushed ice/mixed with carbon dioxide/a combination of these
• bottled or canned drinks, or packaged so that its ready to drink
• drinks with an alcohol content of 1.2% alcohol by volume (ABV) or less

The following drinks are excluded:

• drinks that are at least 75% milk
• milk alternatives e.g. almond milk, soya milk
• alcohol-free beer and wine
• fruit or vegetable juices
• liquid drink flavouring that’s added to food or drinks like coffee or cocktails
• powdered drinks
• cocktails
• infant formula, follow on formula or baby foods
• diet replacement drinks/drinks made for a special medical purpose

Amount of Levy Applied

The levy is tiered:

• Drinks with sugar content between 5-7g of sugar per 100ml will be charged a standard rate of 18p/litre
• Drinks with 8g or more sugar per 100ml will be charged a higher rate of 24p/litre

Money raised from the levy is intended to create a Healthy Pupils Capital Fund to help schools upgrade their sports facilities, and give children access to top quality PE equipment. It is also intended to be used to fund healthy school breakfast clubs. The levy was intended to raise £520m in its first year.

Progress

By April 2018, the estimated revenue from the SDIL had been downgraded to £240m as more than half of manufacturers had reduced the sugar content of drinks since it was announced in March 2016 – the equivalent of 45 million kg of sugar every year - to avoid paying the levy. 

Public Health England's first year progress report on the sugar reduction programme revealed that for retailer own brand and manufacturer branded products there was an 11% reduction in sugar levels per 100ml for the drinks included in the SDIL. The calorie content of SDIL drinks likely to be consumed on a single occasion also fell by 6%. There was, in addition, a shift in volume sales towards products with levels of sugar below 5g per 100g (these are not subject to the levy).

Click here to read PHE's first year progress report

In 2019, PHE published a report highlighting industry sugar reduction progress between 2015 and 2018. The report revealed that there was a 28.8% reduction in total sugar content per 100ml between 2015 and 2018 for the drinks subject to be included in the SDIL among retailer own brand and manufacturer branded products. Furthermore, there was:

• an increase in sales of drinks subject to the levy of 10.2%, but a reduction in the total sugar content in the drinks sold of 21.6%
• a purchasing shift to products not subject to the levy (i.e. drinks with less than 5g of sugar per 100ml)
• a decrease in total sugar purchased from drinks subject to the SDIL per household among all socio-economic groups

Click here to read PHE's second progress report

 

 

A revised analysis of the reduction in sugar from soft drinks has been published, due to an error in the weightings in the original analysis, and has been published by The University of Cambridge in the BMJOpen.  Overall, the estimate of change in purchasing of sugar from all soft drinks combined at one year post implementation of the levy reduces from a 30g (or 10%) fall per household per week to an 8g (or 3%) fall per household per week.  The new, lower, results still have important public health implications and indicate that the levy may have had a public health benefit by reducing household purchasing of sugar from soft drinks.  This does not change the figures used by OHID in their Soft Drinks Industry Levy analysis, or those used in the National Food Strategy.