Posted: 30/09/2021

Sugar tax will hit business but won’t solve health crisis, warn fine food producers

sugar tax
The proposed tax would replace the current soft drinks industry levy

Fine food producers have warned ministers that a blanket sugar tax could have a major impact on their businesses while failing to tackle health problems.

The Government-commissioned National Food Strategy has recommended a £3/kg levy on the sale of sugar for use in processed food as part of a campaign to cut obesity, reduce the burden on the NHS and benefit the environment.

Led by catering businessman Henry Dimbleby, the study said the tax – along with a
£6/kg duty on salt – would “encourage producers to reformulate their products”. 

“Where products cannot be reformulated, and remain high in sugar and salt, the increased cost might be passed on to the consumer,” said the report. “This would make such products less appealing.”  

Emma Macdonald, founder of Devon-based fine food maker The Bay Tree, said there was “a lot of detail to be ironed out” in how the sugar tax would work in practice. 

“What would be defined as processed food?” she asked. “There must be an exemption for foods that require sugar or salt for traditionalism and shelf life. Jam does not set without sugar, so you are affecting the dynamics of a product if you cut it out.

“And what will be done with the money raised? Will it be spent on educating kids about the importance of the right diet? If we don’t change eating habits, then the tax will not work.”

Ruby Williams, founder of Worcester-based Ruby’s Fudge, said she would be unable to change her recipes without dramatically altering her products, so would have to pass on the cost to retailers.

“I am a very small food producer,” she said. “Profit margins can be very tight. I fear that if the tax is implemented, it would make it much less appealing to the consumer, resulting in sales dropping.”

She called for policy aimed at tackling obesity to be precisely targeted. “I do understand that the nation’s sugar problem needs to be addressed but it needs to be done so in products with hidden sugars.”

A Defra spokesperson said: “What we eat and drink, and how and where it is made is part of our nation’s story. 

“It provides employment opportunities, contributes to economies, shapes the landscapes we all value and creates a sense of local pride and identity, right across the UK. 

“The Government is considering the recommendations made in Henry Dimbleby’s review and will respond with a White Paper within six months, setting out our priorities for food systems.” 

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