Placing tax on unhealthy lifestyle choices, such as alcohol and tobacco, has long been an effective way of generating revenue for the country, while (arguably) improving the nation’s well-being. The issue can become a bit more controversial when applied to food, something that is fundamentally fuel for life. There are good arguments for adding tax to sugar sweetened beverages, such as: they do not deliver any nutrients to one’s diet other than energy, a.k.a. “empty calories.” This argument becomes weakened when related to dairy-based drinks and 100% fruit juice, which are a natural source of important vitamins and minerals, such as vitamin C and calcium. The aforementioned is one of the reasons why juice and dairy-based drinks are excused from the newly announced sugar levy on soft drinks. Here we discuss how these exempt drinks categories could fit into the new legislation, whether they should remain in their bench-warming positions, and how the levy might affect their future sales.
 
PepsiCo Would Face An £89 Million Bill
Based on the 2014 Passport Nutrition data and corresponding brand retail volume sales, the top five soft drinks contributors from both tax categories would provide £374 million in sugar tax a year (based on 1:1 kg to liter conversion). If the same legislation was applied to 100% juice and dairy-based drinks, these would contribute £279 million and £60 million in 2014, respectively. This is with the assumption that all products in these categories contain at least 8g of sugar per 100 ml, and therefore qualify for the higher tax band, at 0.24 pence per liter.
 
A recent article published in BMJ (Boulton et al., 2016) found that the average amount of sugar in 100% fruit juice is 10.7 g, and goes up to a whopping 13 g per 100 ml on average in fruit smoothies. These findings are in line with Euromonitor International’s Packaged Food data, where all dairy-based drinks (except for Benecol Cholesterol Lowering Yogurt Drinks) contain at least 8 g of sugar per 100 ml, with the majority crossing the 10 g per 100 ml mark.
 
The top five fruit juice sugar tax contributors (all falling under the highest tax band) would be Tropicana, Innocent, Copella, Princes and Just Juice. In contrast to sugar tax on SSB where Coca-Cola is likely to pay most in sugar tax, here, PepsiCo would be the one handed the highest bill of £89 million.

 
How Much Sugar Comes From Dairy Drinks & 100% Juice?
Based on 2014 packaged food data and the fact that the average sugar content of dairy-based drinks is 9 g of sugar per 100 ml, these only contribute up to 0.9 g of sugar a day, which is arguably negligible.
 
According to the 2014 Soft Drinks data, 100% juice sales have been steadily dropping from 22.6 liters per capita in 2010 to 18.1 liters per capita in 2014. But despite this decline, according to the 2014 Passport Nutrition data, the average U.K. consumer bought approximately 5 g of sugar a day from 100% fruit juice alone (excluding all juice drinks and nectars). At first glance, this value may seem low, especially when compared to 16 g of sugar purchased from all other soft drinks. However, one must consider that pure fruit juice is marketed as healthy, nutritious and, according to the 2016 Eatwell Guide, still contributes to one of your five a day. From another perspective, 100% fruit juice contributes to 23% of sugar bought from all soft drinks. In the article by Boulton et al. (2016) it’s suggested that “Fruit juices, juice drinks and smoothies with high free sugars content should not count as one of the U.K. government’s ‘5 a Day’ recommendations” and fruit should be consumed in whole, rather than liquid, form.”
 
What Does The Future Hold For Juice?
Though the potential contribution in sugar tax from 100% fruit juice is appealing, it is highly unlikely that at this stage any levy will be applied to it. Given the recent bad press, that might not even be necessary. Fruit juice’s positioning is slowly but surely shifting from “good for you” to “juice = cola” and with the loss of its biggest selling point, this could mean bad times for the sales of the good old OJ.
 

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For questions on this article or further insights, contact Victoria Dele, communications executive, at [email protected].