What is the Soft Drinks Industry Levy

In the April 2016 budget, the government proposed a new levy on soft drinks that contain added sugar to tackle the global challenge in rising obesity and related diseases. This levy applies to the production and importation of soft drinks containing added sugar.

The proposals will be implemented on 6th April 2018.

How does it work?

Why it matters to you?

We would recommend you consider the cost impact to your business

Our recommendation is to follow the spirit of the levy and create price differentials between high sugar and low sugar drinks1

Should you choose to maintain your current cash margin on Pepsi and pass on the levy in full to the consumer it would mean for a 16oz serve (454ml) an additional 13p on your MRSP (incl. VAT) 1*

1 Whether you do this and any onward pricing decisions are entirely at your discretion

* Based on if you pour 3 x 7L low yield Pepsi Reg BIB a week producing 42 RTDL at higher 0.24ppl Tax rate i.e. 42 x 0.24- £10.08 x 3

It's also important to consider your guests:

Taste is the No. 1 decision for a soft drink but we are increasingly making healthier choices*

Sugar is the No. 1 concern when purchasing soft drinks**

When dining out 94% of guests will treat themeselves, however 74% still search for healthier options*

81% of parents think it's important to have low sugar options for soft drinks**

Source: *Britvic health research 2017 **Kantar squash drivers Oct 2015 ***MCA Survey 2017

Likely impact to consumers

If customers choose to maintain their current cash margin i.e. pass Levy on in full + VAT

What customers choose to do with price is at their own discretion

200ml NRB

330ml NRB/can

10oz glass (half pint)

12oz glass

14oz glass

16oz glass (Blippar)

20oz glass (pint)

RSP increases (including VAT) by serve size

Steps to creating a levy ready range1

Be Range Ready

Britvic has a great tasting range of drinks for your guests to choose from, that are either below the soft drinks levy threshold or are exempt from the levy.

Pass on the levy

Our recommendation – follow the spirit of the levy and create price differentials between high sugar and low sugar drinks1

Engaging Staff

Educate staff to know the products and facts – they can use recommendations to nudge guests in the right direction

Guest Experience

Provide your guests with sensational drinks that create a great experience – inspirational choices, perfectly served.

1 Whether you do this and any onward pricing decisions are entirely at your discretion

Why this affects soft drinks?

Source: Statistics on Obesity, Physical Activity and Diet, England 2016 report

The Britvic View

Our purpose is to make life’s everyday moments more enjoyable and part of doing that is by helping consumers make healthier choices through making drinks that taste great and are better for you.

Since 2013, we have embarked on a bold, 3-pronged strategy of reformulation, innovation and using the power of our brands responsibly to help consumers make healthier choices.

As a result of our actions, we have removed over 20bn calories from our portfolio since 2013 on an annualised basis, and 94% of our own brands (72% of our total portfolio) in GB are below or exempt from the sugar levy.

Paul Graham
Britvic GB MD