The reaction to George Osborne’s surprise announcement of a sugar tax in the March Budget was immediate. While celebrity chef and campaigner Jamie Oliver took to Twitter to celebrate the government’s “bold, brave” move, it was a bitter blow for the soft drinks industry, with shares in AG Barr, the maker of Irn-Bru, dropping by 4.5 per cent and Britvic by 2.4 per cent within minutes.
The two-tier levy is due to come into force in April 2018, when drinks containing more than 8g of sugar per 100ml, currently including Coca-Cola, Pepsi, Irn-Bru and Lucozade Energy, will be subject to a tax of 24p a litre. A lower band for drinks containing over 5g of sugar per 100ml, including Dr Pepper, Fanta and Sprite, will be taxed at 18p per litre. The government hopes to raise £520 million through the levy in its first year, which will be invested in improving sports in schools.
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