On 16 March, Chancellor George Osbourne announced the budget for the coming year. He simultaneously announced the introduction of a tax aimed at high sugar drinks. VI explores the facts and implications for the vending industry
The Facts
There will be two tax bands – one for products with more than 5g of sugar per 100ml, and one for drinks with more than 8g per 100ml. The Office for Budgetary Responsibility estimates these to be levied at 18p and 24p per litre respectively. The tax will be imposed according to the volume of sugar sweetened drinks imported or produced by a company.
The tax will come into effect in April 2018. Pure fruit and milk-based drinks are excluded, as are the smallest producers. Mr Osbourne expects the tax to raise £520 million in its first year, which will be spent on funding sport in primary schools.
The Implications
What do the experts think? What will the tax mean for the vending industry?
Dr Alison Tedstone, chief nutritionist, Public Health England: “The higher the tax the greater the effect. The point of the tax is to nudge people away from purchasing these thingd and towards purchasing things that are more consistent with a healthy balanced diet.”
Ian Wright, director general of the Food and Drink Federation: “We do not agree that the international evidence supports the introduction of a sugar tax and for this reason would oppose such a move.”
Jonathan Hart, chief executive, Automatic Vending Association (AVA): “It is a quick fix that won’t fix anything apart from lining the Chancellor’s coffers. This move by the Chancellor will simply mean people will be charged more for what they drink rather than being in a position to make an informed decision on what they buy.”
Phil Shelley, national chair of Hospital Caterers Association: “The HCA believes todays proposed sugar tax is a strong step forward. We have some reservations about how expensive the visitor experience already is to hospitals and would be wary of increasing that. Looking at this holistically, whilst raising the price of sugary food and drink we could marginalise the impact by ensuring a reasonable price is set for nutritious alternatives.”
Richard Hall, chairman of food and drink consultancy Zenith International: “I very much doubt it will raise £520 million. I do think it will lead to widespread reformulation of some drinks, as has already happened for many products, especially for children in school. Even though the funds raised will reportedly be used for improving sports facilities in schools, I also doubt the tax will make a material contribution to reducing obesity. Really reducing obesity requires a far broader programme that also involves parents and health professionals, information and training, portion and serving moderation as well as activity and exercise. My great worry is that the semblance of action will distract attention from developing a proper plan. Obesity does need tackling – with all round action.”
Vending operators in the UK are already taking the initiative to affirm their dedication to helping the nation make healthy choices.
Excel Vending: “As with any tax, there will be winners and losers. Sugar tax may encourage people to stop and consider a cheaper but healthier option. However it is the availability of good quality healthy alternatives that will ultimately help to get them making the right choices. For example, many of our sites in NHS and school buildings have exclusively healthy offerings. We do think people are starting to appreciate the benefits of healthy eating, however it is just the start.”
Complete Vending Services: “Working closely with the Automatic Vending association and relevant suppliers we will introduce a full range of sugar free products to our selection – furthermore we aim to offer a minimum of 15% healthy and sugar free options available in all of our machines by the end of 2016.”
Aaron Prout, Livewell Vending: “Our pioneering approach to vending means we are well placed to respond to [the sugar tax]. All of the drinks in Livewell’s Hydration Stations in main school locations will be unaffected by the sugar tax. In fact, over 95% of the drinks stocked across all our cold drinks vending machines will be ‘tax-free’.”
What are your thoughts on the implications of the Sugar Tax for vending? Share your thoughts at @vendnews
