Budget 2016: Chancellor George Osborne warns drinks companies not to "waste time and money" by launching legal challenge to the new sugar tax

Jessica Morris
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Osborne said the government would robustly defend the sugar tax (Source: Getty)

Chancellor George Osborne warned drinks companies against wasting time and money by launching a legal challenge to the new sugar tax.

It comes as firms are gearing up to go to war with the government over his controversial sugar tax, and are considering fighting the new levy in the courts.

Speaking before the Treasury select committee, he said: "If they want to have an argument about the sugar tax, bring it on."

"We took legal advice before introducing it and we're very clear it's legal and we would of course robustly defend it if there was a legal challenge," Osborne added.

"But I'd say to companies: don't waste time and money on a legal challenge. Use this period to look at your products and see if you can reformulate."

The tax will be levied on companies that sell sugary drinks, and is expected to raise about £500m annually for the Treausry's coiffers.

It would apply to drinks with a total sugar content above five grams per 100ml, with a higher band for even more sugary drinks. It's predicted to add 18 pence per litre, or 24 pence for those in the higher band.

Consequently, the likes of Coca Cola, AG Barr and Britvic have instructed trade body the British Soft Drinks Association to pursue “all options”.

Earlier today, a poll carried out for the Evening Standard shows Osborne's ratings have plunged after his Budget.

It comes as an Ipsos Mori poll carried out for the Evening Standard shows Osborne's ratings have plunged after his disastrous eighth budget. Six in 10 people are dissatisfied with the chancellor, up from 46 per cent in the month before the Budget.