UK to extend sugar tax to cover bottled milkshakes and pre-packaged lattes

Sweet-toothed consumers face paying more for their bottled milkshakes and pre-packaged lattes after the government confirmed plans for a tougher sugar tax.

Designed to tackle obesity, the levy currently applies to drinks with a sugar content of 5g for each 100ml. However, after a public consultation this is being cut to 4.5g for each 100ml.

The health secretary, Wes Streeting, told the Commons on Tuesday that an exemption for milk-based drinks would also end.

“We’re expanding the soft drinks industry levy to include bottles and cartons of milkshakes, flavoured milk and milk-substitute drinks,” he said.

“This government will not look away as children get unhealthier and our political opponents urge us to leave them behind.”

The changes will not happen immediately; a technical consultation on the draft legislation will be published next year, before the legislation takes effect on 1 January 2028.

Officially called the soft drinks industry levy (SDIL), the tax applies to most sugary and fizzy soft drinks sold in cans, bottles and cartons in supermarkets.

Previously, milk-based drinks were exempt because they contain calcium, which is encouraged in children and young people’s diets. However, the high sugar content of some of these drinks has prompted the rethink. A “lactose allowance” will take into account naturally occurring sugars in milk.

The tax does not apply to drinks made and served in cafes, restaurants and bars, which means coffees, lattes and other milky drinks served on the high street would not come under this tax.

The government consultation originally considered whether to lower the threshold to 4g sugar for each 100ml. It is unclear what the new level will mean for soft drinks such as Pepsi that sit at 4.5g.

The sugar tax was introduced by George Osborne in 2016 to tackle rising obesity and has been deemed a success as it prompted many drinks makers to change their recipes.

To date, it has led to a 46% reduction in the sugar contained in soft drinks affected, the government says. Nearly 90% of the drinks on sale contain less sugar than the level at which the tax applies.

Currently, the tax is charged at 18p for each litre on drinks containing at least 5g of total sugar for each 100ml, and 24p for each litre on drinks with 8g of sugar or more.

The government says companies have the option to reformulate their products or face paying the tax.