Shoppers could soon be paying more for bottled milkshakes, flavoured milks and pre-packaged lattes after the government today (Nov 25) confirmed plans for a tougher sugar tax.
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.
Speaking at the Commons, health secretary Wes Streeting said, “We are expanding the soft drinks industry levy to include bottles and cartons of milkshakes, flavoured milk and milk-substitute drinks.
“This government will not look away as children get unhealthier and our political opponents urge us to leave them behind.”
Health secretary Wes Streeting told MPs the levy threshold will be lowered following public consultation, with the sugar limit reduced from 5g per 100ml to 4.5g per 100ml.
Crucially, milk-based drinks, previously exempted due to their calcium content, will now fall within the scope of the tax.
A technical consultation on the draft legislation will be published next year, ahead of the new rules coming into force on 1 January 2028.
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 be included to account for naturally occurring sugars in milk.
The SDIL, introduced in 2016, currently charges 18p per litre on drinks containing 5g–8g of sugar per 100ml and 24p per litre on drinks above 8g. The Treasury says it has driven major reformulation, with sugar levels in affected soft drinks reduced by 46% and nearly 90% now falling below the taxable threshold.
Milk-based ready-to-drink products have until now avoided the levy, but government concerns over high sugar content in many bottled frappés, iced coffees and milkshakes have triggered the policy shift.
The levy will continue to exclude drinks freshly prepared and served in cafés, restaurants and bars, meaning high-street coffees and lattes remain unaffected.
It is not yet clear how the new threshold will affect reformulated lower-sugar soft drinks such as Pepsi Max variants that sit at 4.5g per 100ml.
Ministers said the companies have the option to reformulate their products or face paying the tax.
Some drinks that would come under the new proposal include: Starbucks Caramel Macchiato Iced Coffee (8.2g sugar/100ml), Shaken Udder Vanillalicious milkshake (8.4g sugar/100ml), Yazoo Strawberry Milk Drink (9.6g sugar/100ml), and Alpro Soya Chocolate long life drink (7.6g sugar/100ml).