Sugar tax review would be sweet news for catering trade

The sugar tax has hit the headlines again as the Conservative Party leadership race heats-up. Boris Johnson is pledging to review and halt the soft drinks industry levy, while before pulling out Matt Hancock made plans to extend the tax to include more items such as milk-based drinks.

In the interests of the catering trade and public health, a review of the sugar tax at the very least would be a positive move forward. In my opinion, it would be even better to scrap it completely.

No doubt, it’s important to tackle obesity and improve health. However, trying to achieve this by slapping a tax on sugar content is a poorly informed and an ineffective approach.

There’s a growing trend of consumers moving towards responsible foods and drinks. People don’t want synthetic and artificial flavourings. They want natural ingredients. This is why the sugar tax is ineffective and should be reviewed as a priority.

Prior to the introduction of the tax in April 2018, we surveyed consumers about drinks. We found between 40% – 50% of people are willing to pay more for premium quality and natural flavours. Only about a quarter of people found artificial sweeteners appealing.

With this in mind, we took the brave decision not to reduce natural sugar content if it impaired the taste of our Franklin and Sons drinks. The range of premium soft drinks, mixers and tonics is made using all-natural ingredients. Switching to artificial flavourings was never considered and our focus always remained on providing consumers with a great natural taste.

The drinks are sold in restaurants, bars and pubs across the UK, as well as supermarkets. It was little surprise when we saw the introduction of the sugar tax in April 2018 had no noticeable impact on sales across the range. In fact, we’ve seen sales continue to grow and more than double in the last year.

It was even less of a surprise to see other industry data outlining the ineffectiveness of the tax. Nielsen data shows the sugar tax has had little impact on consumer behaviour. Around two thirds (62%) of consumers claim to buy soft drinks with the same frequency they did before the tax was enforced.

The sugar tax is not helping to improve health. In fact, it’s running the risk of doing the exact opposite. It is coercing the industry into switching from natural sugars to lab-engineered alternatives like aspartame. There are a number of major health concerns associated with this and until more conclusive evidence is available, its usage and consumption shouldn’t be encouraged.

The sugar tax is simply punishing businesses and consumers who have to pay more for choosing natural ingredients. This is hindering innovation and economic growth. It makes it more challenging for the catering trade, which is already contending with rising costs and consumer spend being squeezed.

This type of taxation isn’t an inclusive or collaborative approach. It’s restricting freedom of choice, risking alienating and patronising businesses and consumers. This just makes it harder for all parties – government, health organisations, manufacturers, retailers and restaurants, and the public – to unite in working towards a healthier future.

Scrapping the sugar tax would stop wasting time and resource. It would allow more constructive effort to be invested in approaches that better respect and understand consumers and businesses. This would be more beneficial to public health.

By Steve Perez, founder and chairman of international drinks company, Global Brands