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Changing habits- Sugar tax - one year on, how this has affected the UK's drinks industry

By rotide
Created 20/06/2019 - 15:38
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By Alan Barratt co-founder of Grenade [1]

The latest shocking NHS report has shown that obesity related hospital admissions have risen 15% in a year.
In April 2018, the government brought in the sugar tax - a measure that made it more expensive for businesses to create drinks with high sugar content. The hope was that this would be a help in forcing the public into making healthier choices when buying drinks. Businesses were made to react and with the anniversary of the tax happening just over one year ago, it's worth taking a step back to see what effect this has had on the food and drink industry and whether the government initiative is working for the public.

The drinks industry has reacted in different ways over the past year. Some pubs have pushed their prices up, restaurants have changed their soft drinks policy, while certain drinks companies have changed their recipes. For example, Irn-bru changed its recipe by cutting the sugar content of its drinks by half. This has cost the business £1.4m in additional costs, which has ultimately been passed onto customers. Businesses have had to react to this tax and adapt to changes, but it seems consumers are often having to foot the bill.

One of the biggest effects the sugar tax has had on the industry is encouraging businesses to create their own healthier, low-sugar ranges. This has been done to either offset the cost of the sugar tax that's been placed on legacy products or to increase business profits. These companies have seen sales data that suggests the public are willing to change their behaviour if given the option of healthier alternatives. This is, however, being seen by some as a cynical marketing plan designed to curry favour with a more health conscious modern generation of consumers all the while simultaneously improving their bottom line.

The government's sugar tax initiative is a great start to solving the current obesity epidemic, but there's clearly a need to roll this out to the food industry too. Brands operating in the food industry have been quick to bring out healthy alternatives in response to an increase in demand for these products. At Grenade [2], we have always provided genuinely healthy products and are urging consumers to join Grenade on our snacking revolution campaign, and move away from high sugar and high fat products to healthier alternatives.  However, unless the government forces the food industry's hand in implementing more wide-ranging reform through taxation among other methods, it is unlikely that their efforts will lead to a genuine improvement in public health.

The lessons learnt from the sugar tax show the public is willing to change their habits if given more choice. Businesses have had to adapt by either increasing their prices, changing recipes or creating new healthier options to the paying public. The government should see this as valuable evidence to roll the tax out to the wider food industry as the next stepping stone to stopping the obesity crisis in the UK.  


Source URL:
https://www.newbusiness.co.uk/articles/marketing-advice/changing-habits-sugar-tax-one-year-how-has-affected-uks-drinks-industry