Sugar Tax adds extra £5m to retail sales in just 2 weeks, despite 7% switch to alternatives - but is aspartame any better?

Since the controversial UK soft drinks sugar levy came into force on 6th April 2018, market data from IRI, the provider of big data and predictive analytics for FMCG manufacturers and retailers, indicates that in the two weeks following the introduction of the sugar levy, sales of soft drinks rose in value by £5m to £167m per week. As prices of many soft drinks on supermarket shelves rose, people shifted their soft drinks purchases to low sugar alternatives and water meaning that an additional 7%, 11m litres, of lower sugar soft drinks are being consumed every week.

The Government’s claimed that the tax would raise an additional £500m, which they promised to invest in funding sports equipment and breakfast clubs for children.  The move was put in place, they claim, to tackle obesity, with a quarter of children now being overweight when they start school. The sugar levy comprises two tax bands; 18 pence per litre (5g of sugar per 100ml) and 24 pence per litre (8g of sugar per 100ml).

All major multiples have reflected the new higher prices on shelf as major brands pass on the cost of additional taxes to the consumer.

Big brands have deployed a range of strategies to mitigate the levy’s effect and harness consumer appetite.  In fact, more than 50% of manufacturers have changed their formulas to cut sugar, according to figures from the Treasury published last month.  Pepsi and Coca-Cola, who have made no change to their formulae, are the only brands to experience a small impact in volume, down -2% and -1% respectively, whilst all other major brands have seen a positive impact in volume sales.

In value terms, larger brands have fared well across the implementation with Coca-Cola being the standout winner (up £2m a week comparing the pre and post trend). Coca-Cola’s strategy to maintain price parity across full and low/no sugar alternatives but adjust packet sizes to fit the new rules of the game is distinctive. Additionally, new flavour options are well baited hooks to catch the eye of shoppers, as most ‘full sugar’ drinkers are questioning their next purchase due to the sizeable price hikes.

Stephen Jacobs, Insight Director at IRI said:

“The introduction of the UK sugar levy has had a clear impact on the soft drinks category without effecting volume sales, so far. Good weather always leads to a rise in soft drinks sales but there is no doubt that higher prices have driven consumers to make healthier choices with one of every 13 soft drinks sold a low sugar alternative. We look forward to seeing how the big brands can capitalise on Britain’s changing habits and harness this growth successfully.” 

However, the re-engineering of soda to meet new sugar-reduction measures has not proved popular with all commentators –  because in most cases, sugar has simply been replaced with aspartame – and these are now being marketed to children in cafes, restaurants and supermarkets.

Many within the UK are concerned that increasing aspartame consumption is the last thing we should be doing.  There is plenty of anecdotal evidence linking excessive consumption to all manner of neurological and physical health conditions, although none of the research has been conclusive on this.  However, there is a definite link between consumption of aspartame and obesity – and at least one study claimed to have found a worrying link to diabetes.  While the jury is still out, this is hardly something we should be promoting as a healthy option.


The Irish News reported:

“Studies also show that artificial sweeteners can make us fat. One study found that people who drank more than 21 diet drinks per week were twice as likely to become overweight or obese as people who didn’t drink diet drinks.”

The Soil Association quoted psychologist Susan E. Swithers of Purdue University, who says:

“Artificial sweeteners are not the answer to childhood obesity,” states , bluntly. “Exposure to hyper-sweetened foods and beverages at young ages may have effects on sweet preferences that persist into adulthood.[2].  We consequently seek out the very sugary foods we’re meant to be avoiding – studies have shown that high levels of sweetener consumption are associated with excessive sugar consumption.”

While many are applauding the reduction of sugar, the rise in the use of artificial sweeteners is anything but sweet for many.

The Association are calling for Brits to change their appetites for sweet tasting drinks rather than changing the composition of them, calling for the tax to be extended to drinks using artificial sweeteners:

“Perhaps flogging children artificially sweetened fizz isn’t as benign as public health guidance seems to suggest…. The unpalatable truth is that so long as we remain hooked on sweeteners, our best efforts to tackle childhood obesity and win #BritainsFatFight are likely to fail.”