Sugar tax delay called for by food and drink industry after Brexit uncertainty hits the sector

The Food and Drink Federation (FDF), an industry lobby group whose members include the makers of Coca-Cola, Pepsi and Nestlé, has launched a manifesto 

Zlata Rodionova
Monday 11 July 2016 12:04
Comments

Britain’s food and drink industry has urged the government to delay its plans for a sugar tax, fearing it will add an “unwelcomed burden” on an industry already hit by a weak consumer confidence and a looming skills gap after the UK’s vote to leave the EU in June.

Ian Wright, the director general of the Food and Drink Federation (FDF), an industry lobby group whose members include the makers of Coca-Cola, Pepsi and Nestlé, has launched a manifesto to help the sector deal with Britain’s decision to exit the EU membership, calling it the “UK’s most significant challenge ever.”

The sugar tax is due to take effect in April 2018. But Wright said the levy, which has been heavily criticised by the industry, should be put on hold.

“Government has an obligation to act quickly to support confidence and competitiveness – and to provide reassurance and stability,” he said.

The policy, if proceeded, would add an “unwelcome additional burden on a hard-pressed industry at a moment of crisis”, Wright said.

“It seems to me inconceivable that the small number of civil servants with expertise in excise duties within HMRC would, at this time, be working on the sugar levy and not on the replacement for the customs union,” he added.

The FDF and the British Soft Drinks Association (BSDA) have both expressed their disappointment at the George Osborne’s decision to put a tax on sugary soft drinks in the March Budget.

Wright said the industry will continue to oppose the sugar levy which was not evidence-base and not “the least-bit effective”.

Leendert Den Hollander, vice-president and general manager of Coca-Cola, previously said he believed there was no proof or evidence that sugar tax is effective.

Paul Johnson, director of Institute for Fiscal Studies also said only one-fifth of total sugar consumption comes for drinks, meaning 80 per cent of sugar consumption comes from other things.

Mr Johnson stressed that the policy for a sugary drinks tax - not a blanket sugar tax - could mean consumption of sugary foods will rise in the aftermath “as people move away from drinks to other sugary products”, substituting Coca Cola for chocolate, for example.

But the Chancellor expects the tax to raise £520 million. The money to be side set aside as additional funding for sport in school.

Separately in his manifesto, Wright criticised the government saying the Remain campaign had no “plan B” while the Leave campaign had no plan at all.

The FDF warned of “significant” challenges following the vote, saying it was imperative that the industry retained its ability to trade across the EU - the UK's largest market for exports of food and non-alcoholic drink, according to the FDF.

Wright added it was also time to provide speedy reassurance to its “valued” foreign workers.

Nearly a quarter of the present food industry workforce is from European countries outside the UK, according to the FDF.

“Our industry will require cast-iron assurances that their access to a flexible workforce, with a wide range of skills and capabilities as well as a strong work ethic, will continue,” Wright said.

“The Government must therefore develop a new migration policy that ensures manufacturers will have continued access to the workers we need to address a looming skills gap - and the drive for future innovation to support the UK's competitive advantage,” he added.

Meurig Raymond, the president of the National Farmers Union previously said the referendum result was a “political car crash”, and warned that the UK’s dependence on imports combined with a weakened pound would mean the country could expect to see the price of food go up.

“Sadly, we only produce 60 per cent of the food we consume. We’ve seen our self-sufficiency fall dramatically, so we are very dependent on imported food,“ he said.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in