What is the problem that a levy would tackle?

All children should be able to access healthy food, no matter where they live. The current market is flooded with food that’s high in sugar and salt, increasing risk of obesity and of conditions like heart disease, type 2 diabetes, dental decay, stroke and cancer.

Processed food is a huge contributor to excess sugar and salt consumption, with up to 85% of the salt we eat already in our food when we buy it, and 60% of our added sugar consumption coming from biscuits, confectionery and desserts alone.

In the UK 1 in 4 children are above a healthy weight by the time they start school, rising to 1 in 3 children by the time they leave primary school. And by adulthood, two thirds are living with obesity or are overweight. The conditions associated with high sugar and salt intake have a big cost – both in direct medical costs and through reduced productivity and participation in the workforce.

Why do we need more industry levies to make food healthier?

Analysis of 14 government strategies published from 1992 to 2020 containing 689 wide-ranging policies shows that only a handful backed up by legislation or mandatory standards had any impact. The failed measures included many calls for industry to voluntarily improve the healthiness of food and drink. Notably in the Government’s sugar reduction programme between 2015 – 2020, the only category to meet (and exceed) the target of 20% reduction, was in sugary drinks, where a levy had been applied, and in milk-based drinks, which are under consideration for extension of the levy. Average sugar levels across other retail and manufactured products fell by a sales weighted average of 3.5%. And in the out of home sector the average reduction in sugar was only 0.2%.

We are clear that a new industry levy is not a silver bullet solution. Reformulation is a gradual process, and it may take time for consumers to adapt to new tastes and products. Government and businesses may need to invest in marketing and education campaigns to help promote the benefits of healthier options, and to slowly change consumer preferences. We would recommend that any new industry levy be introduced as part of a broader health strategy which includes a comprehensive package of policies and programmes designed to help everyone eat healthier food.

What are the benefits of a new industry levy?

This depends on the policy that Government adopts. Modelling of the impact of a broad salt and sugar levy (policy option 1), (as proposed by the National Food Strategy) shows that lower average sugar and salt intake would reduce average calories eaten per person per day by 15-38 kcal, halting weight gain at a population level. It would also save 37,000 – 97,000 estimated years of healthy life to the population currently lost to diet-related illness or disease in the UK every year. Another modelling study in 2019 found that a fiscal measure delivering a 20% price increase to high sugar snacks (eg. confectionery, cakes and biscuits) could support a reduction in UK prevalence of obesity by 2.7%, with the largest effects seen in the lower income households with highest levels of overweight.

Depending on how many businesses don’t reformulate their products, a policy options could raise between £2.9bn to 3.4bn a year. Conversely, the more businesses who make their products healthier, the less money it would raise, but the bigger the health impact, saving lives, and saving the NHS money. Additional health impacts could be created if the money raised were also directed to programmes to improve children's health. Either way it’s a winner!

Is there support for a new food industry levy?

73% of the public in the UK say that they would support a requirement of food manufacturers to reduce sugar and salt from everyday foods. When explicitly asked about a new industry levy where the money raised would go towards schemes to feed children and improve their health public support remains at a similar level of over two thirds of the public (YouGov poll, Dec 2022). Support for such a measure has increased in the last 2- 3 years, with a 2020 poll by Ipsos Mori for the Health Foundation showing that 63% of people in the UK would like the Soft Drinks Industry Levy to be expanded to include other sugary foods such as sweets and biscuits.

As well as our supporting organisations, there is growing political and cross-party support with high profile advocates including former Conservative Leader William Hague, and chair of the Health Select Committee, Steve Brine MP, and a 2022 Ipsos Mori poll of MPs showed 82% of Labour MPs are supportive. Some businesses, such as Danone, have also started calling for an industry levy as it would create a level playing field, rather than penalising progressive action.

Would a new industry levy apply to small and medium businesses?

Fundamentally, the government should not make exemptions if they are impossible to implement or if they seriously reduce the impact of the policy. Conversely, some exemptions may be needed, such as if there are practical difficulties in implementing. The government has currently exempted small businesses from the Soft Drinks Industry Levy, defining these as companies producing less than one million litres of liable drinks each year.

Did the sugary drinks tax work?

Yes! The Soft Drinks Industry Levy (SDIL) has succeeded in reducing sugar content across soft drinks purchased by all socio-economic groups.

Between 2015 and 2020, the total sugar sold through soft drinks fell by by 34.3% (that’s 46 million kg a year), and household intake of sugar in soft drinks fell by an average of 8g a week*.  

SDIL is already improving our health too – research has shown that it has reduced obesity levels. The introduction of the levy is associated with 5000 fewer cases of obesity among 11 year old girls, and a 12% reduction in children being admitted to hospital for tooth extractions.

It has also raised more than £1.5 billion in the first five years which has helped Government to fund primary school sports and PE, school breakfasts and holiday activity programmes. Read this blog about the impact five years after the levy was introduced.

And it is narrowing inequalities – the amount of sugar purchased in soft drinks has fallen the most amongst low-income households. 

All of this has happened without damaging the sales volumes, stock market performance or domestic turnover of soft drinks companies. Sales of soft drinks rose 5.7% in the first year of the levy. 89% of sales now comes from low and no sugar drinks.

*This figure has been updated in December 2023 following an error identified by the authors of the original 2021 analysis. 

Won’t levies hit the poorest the hardest?

The current evidence does not support the idea that a new tax would disproportionately affect the living costs of lower income households. This is largely due to the reformulation that would take place meaning companies avoid paying the levy. Additionally, while lower income groups have a smaller budget for food, and so any price increases would account for a high proportion of their overall food expenditure, they are likely to be more responsive to price increases and to avoid consumption of taxed goods.

Additionally, the impact of dietary-related disease hits people on lowest incomes the hardest, affecting their health and life chances. People are fed up with the food options that are available and that they are not able to access or to afford good food.

A levy would make these foods healthier, and any money raised could be targeted to help people most impacted by poverty in society. The Soft Drinks Industry Levy revenue was linked to increased provision of breakfast clubs and holiday food provision, alongside money for PE and sports in schools.

An analysis of the Soft Drinks Industry Levy (SDIL) which explored the impact of the policy on different consumer segments, found the levy had the greatest effect on less affluent consumers, who also tended to be more likely to purchase soft drinks. For example, the research showing the 8% relative reduction in obesity levels in year six girls, found the reduction greatest in girls whose schools were in deprived areas.

What is reformulation?

Reformulation is a public health intervention used in the UK and globally to improve population diet and prevent ill health. It sits within a package of policies designed to support people to opt for healthier foods in the longer term. Reformulation includes reducing salt, sugar, fat or calorie content of products. This is can be achieved by small gradual changes in the recipes and/ or pack or portion sizes. Most people will not notice the changes as palatability will not be affected. Ideally sweetness or saltiness should be gradually reduced and replacers not used. Companies are constantly reformulating their products for a number of reasons, including adapting to consumer tastes, removing allergens, and launching new products.

However, reformulation is only one approach to shifting our food intake towards healthier options. Reformulated products may be slightly healthier than their sugar or salt-laden alternatives, but a low-sugar fizzy drink or a lower salt crisp should not be promoted or marketed as being ‘healthy’.

There is growing awareness that excessive consumption of ultra-processed foods may in itself also contribute to increasing risks of diet-related diseases. Reformulation must therefore go hand in hand with other interventions to restrict unhealthy food and drink marketing, and to increase people’s access to and consumption of fresh, nutritious food including intake of fruit, vegetables, fibre and other healthier nutrients.

What about artificial sweeteners?

As health organisations, we support measures that achieve sugar reduction without simply replacing sugar with non-nutritive sweeteners. For example, prior to the Government’s introduction of SDIL, our Children’s Health Fund piloted a sugary drinks tax that modelled how revenues could be used to invest in free drinking water fountains as an alternative to reliance on bottled sugary drinks.

In May 2023, the World Health Organisation (WHO) issued new guidance advising against reliance on use of non-sugar sweeteners in order to support weight loss or reduce risk of diet-related illnesses. The evidence suggests that there is no benefit from long-term use of sweeteners, but also that excessive consumption of them could also contribute to increased risks of preventable diseases.

There is also evidence that low and no-sugar fizzy drinks may still increase risks of tooth decay, and perpetuate preferences for sweeter food and drink. We therefore believe that we should be reducing our overall consumption of these drinks, and that manufacturers should follow WHO guidance and find alternative reformulation options, especially eliminating artificial sweeteners such as aspartame from their products.

In the long term, as a nation we should be aiming to break with reliance on excessively sweet-tasting foods. Plain water or plain milk are much better choices for hydration and nutrition than any sugary or artificially sweetened beverages.

Does the campaign aim to reduce consumption of ultra-processed foods?

There is a large overlap between products high in sugar, salt or saturated fats and ultra-processed products. Depending on the fiscal model chosen by policy makers, there could be a variety of responses by industry, including changing recipes of existing products, increasing prices of less healthy products or reducing portion sizes, or even shifting altogether to new and healthier new product ranges. Through this mix of responses, we would hope to create a shift in sales and consumption that both reduces excess salt, sugar and calorie levels in our food, and raises awareness of the risks of consuming large amounts ultra-processed products more generally.


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