Government plans to tackle obesity by imposing a levy on soft drinks have been criticised by the Association of Convenience Stores (ACS).

Responding to the consultation on the proposed levy it urged on the Government to focus on tackling obesity through a partnership approach with retailers and suppliers.

The Government has proposed that soft drinks with a sugar content of 8g per 100ml or more should be taxed at 24p per litre, while drinks with 5g to 8g of sugar per 100ml will be taxed at a lower rate of 18p per litre. The plans will exclude pure fruit juices and milk-based drinks.

In its submission ACS said soft drinks represent 5.5% of sales value in the convenience sector, and smaller retailers are potentially going to be disproportionately affected by increased costs as a result of the introduction of the levy, as larger retailers have greater market share and trading leverage.

It also said there is limited evidence that a levy on soft drinks manufacturers would reduce soft drink consumption and reduce childhood obesity, and that the introduction of a levy on soft drinks has the potential to create an illicit market for the category, similar to the alcohol and tobacco markets where duty is applied.

ACS chief executive James Lowman said: “Convenience stores are already playing an important role in addressing the issue of obesity by increasing their ranges of healthy and fresh foods. We are concerned that a levy on soft drinks manufacturers will result in increased costs for retailers, as the manufacturers pass on the levy through the supply chain.

“Smaller retailers do not have the buying scale to resist these costs being passed on to them, whereas large multiple retailers can push back against additional costs caused by exchange rate changes, production cost increases, or the introduction of a levy like this. We fear that the sugar levy will disproportionately impact smaller retail businesses.

“We do not believe that a soft drinks levy will be an effective measure in reducing consumption, and encourage Government to continue to work with suppliers and retailers on a partnership approach instead of this particularly blunt piece of regulation.”

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