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With days to go until the arrival of the soft drinks sugar levy, Kawther Hashem, nutritionist and spokesperson for pro-levy lobbyists Action on Sugar, explains why confectionery is next on the tax hit list
With days to go until the arrival of the soft drinks sugar levy, Kawther Hashem, nutritionist and spokesperson for pro-levy lobbyists Action on Sugar, is toasting a job well done. Jack Courtez and Tom Gockelen-Kozlowski report
The implementation of the Soft Drinks Industry Levy is just a week away and while manufacturers are now providing advice to stores when it comes to the reformulations they’ve made and the altered merchandising advice they suggest, there are also a number of uncertainties.
Will consumers accept their favourite products’ new lower sugar versions? Early evidence is they won’t notice. Will retailers see more upheavals like these in the coming years as other categories’ sugar contents become the object of politicians’ ire? Perhaps. Two things seem certain at this point, however: first, it will be consumers and retailers who most sharply feel the effects of this tussle between lobbyists and manufacturers and, second, chief anti-sugar group Action on Sugar hasn’t stopped its campaigning.
With a few days to go before the levy comes in, Kawther Hashem – nutritionist and spokesperson for the lobby group – speaks to RN, reviewing, from its point of view, the impact, effect and importance of the levy.
Throughout the journey towards this tax, the group’s logic has remained the same. “Over the past two or three years the choice of soft drinks has always been weighted towards high-sugar products. I think there is an opportunity here to change that, with even convenience stores offering more low-sugar options,” Ms Hashem says.
Yet, with manufacturers having reacted in manifold ways to the law change, Action on Sugar is in a positon to review its effects.
Reformulations – Lucozade Ribena Suntory has made all Lucozade Energy products sugar-free and AG Barr has done the same with Irn‑Bru – will have the desired effect, it believes. “We’re expecting more reformulated products to hit the market ahead of 6 April. For those that haven’t reformulated we’re expecting to see reduced product sizes. Total volume of sales will be less so they will pay less levy even if they chose not to reformulate. Both will result in a consumer having less sugar coming from these products.”
She does, however, suggest manufacturers should be making more of their own work to cut sugar – providing on-bottle or advertising messaging on the work they’ve done. Much of the success of the levy will be down to “whether companies are going to flag whether there’s been a reduction in sugar in their products, and I gather they are not going to do that,” she says.
So what about those who say that this is the direction the industry was headed in anyway – that the sugar levy is merely a heavy-handed but needless intervention?
Kawther Hashem uses Tesco as an example of why this is incorrect.
“Since the sugar levy plans have been introduced we’ve seen Tesco announce that its own label soft drinks are to be reformulated below the lowest sugar tax threshold. Its plan was to reduce it gradually, but now it has no high-sugar products, it’s the same with Asda. We have seen that with the bigger companies – they’ve made quiet yet severe reductions in most of their products. They are also looking to diversify their portfolios to include more low-sugar drinks so the levy has definitely had a significant impact.”
Yet, while the levy has inspired a lot of work behind the scenes as manufacturers adapt their portfolios (see our comprehensive guide on page 33) Action on Sugar admits that only “some” customers will be aware of the changes ahead of next Friday.
One way customers might notice the changes will be on the reduced stock on convenience store shelves, Ms Hashem says. “We might not see that much of a price change, we might just see convenience stores buying less and stock less high-sugar products because they think consumers might not buy them because there’s a price increase.”
Store owners will be hoping customers will buy other lower-sugar products rather than avoiding the category entirely.
So will they come for other key categories? Ms Hashem confirms as much.
“Next on the agenda is how to reduce calorie levels in confectionery. Confectionery is quite cheap and is constantly on promotion at different retailers throughout the UK and I think we do eat excess levels of confectionery and sugar from this category. If we are to look at ways to reduce the public’s sugar consumption, one of them could be different taxation measures, not necessarily on consumers but on the manufacturers because want them to diversify their portfolios.
“We understand it is a category that is hard to reformulate and reducing intake by looking at price differentials might be another option,” adds Ms Hashem. “So we might start to call for not necessarily a sugar tax, because confectionery contains fat as well, but looking at overall calories. And if your product is packaged in a way that promotes excess intake, you should pay a higher levy.”
Such action is needed, the message seems to be, until consumers learn what’s good for them: “It’s always going to be a challenge and eventually consumers will realise that if you want those products, they will be more expensive because those companies are refusing to reformulate.”
For retailers who have spent recent years planning, budgeting and worrying about anti-tobacco laws and the upcoming soft drinks levy, this will be as exhausting as it is worrying. Monty Python’s the Black Knight may well come to mind: key categories cut down one by one while the need to keep positive and keep trading remains.
“I’d like to see stores making more lower-sugar options available in their stores and looking at promotions. We know people are price-sensitive so if there are promotions on products that are perceived to be healthier it could encourage people to go back and buy those products again rather than buying the things they have always bought,” Ms Hashem says.
For those stores which have spent decades relying on the core impulse categories that their customers demand, achieving this vision may well prove the biggest challenge yet.
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