Her Majesty’s Treasury (HM Treasury) has released the details of a proposed soft-drink levy announced during March 2016 budget talks as part of the U.K. government’s childhood obesity action plan.

Slated to take effect in April 2018, the Soft Drinks Industry Levy (SDIL) would affect the manufacturers of added-sugar soft drinks “with total sugar content of 5 grams or more per 100 millilitres, with a higher rate for drinks with 8 grams or more per 100 millilitres.” The levy exempts beverages with no added sugar—including 100-percent fruit juice—as well as alcohol beverages with alcohol content above 0.5-percent alcohol by volume. The SDIL would also apply to imported soft drinks.

HM Treasury has requested comments on the SDIL by October 13, 2016. Among other things, the government seeks evidence and views from respondents about (i) “the types of added-sugar low alcohol products that may be captured by the levy, and the appropriate approach to these products in the levy legislation”; (ii) whether “making the packager or bottler liable for payment of the levy is the least burdensome option for producers of soft drinks”; (iii) “an appropriate production or import level to define a small operator for the purposes of any exemption or relief”; (iv) whether “the proposal to provide an export credit against future levy liability, restricted to direct exports by the producer, is the best overall solution”; and (v) the proposed registration procedures, compliance arrangements and support.

“This is a levy on producers and importers, and not on consumers, and is designed to encourage producers to reduce the amount of sugar in their products and to move consumers towards healthier alternatives,” states the childhood obesity action plan. “We have given producers and importers two years to lower the sugar in their drinks so that they won’t face the levy if they take action. Many manufacturers have already taken steps to reduce the overall levels of added sugar in their drinks, but the levy will create stronger incentives for action.” Additional details about the SDIL appear in Issue 598 of this Update.