Irish government gearing up to introduce sugar tax on soft drinks

Francesca Washtell
Follow Francesca
A glass full of sugarcubes
Sugar sweetened soft drinks have come in the firing line for first the UK and now Ireland

The sugar tax announced by former chancellor George Osborne's looks like it's catching on, with the Irish government expected to introduce a similar levy on soft drinks in its upcoming budget next month.

Although minister for finance Michael Noonan is believed to be gearing up to announce the levy within weeks, its implementation may be delayed for a year until 2018 — around the same time that the sugar tax will be launched in the UK.

The Irish government, which is led by Taoiseach Enda Kenny's Fine Gael party, pledged to launch a new tax on sugar-sweetened drinks in its programme for government in May.

It is unclear at this stage exactly how much the levy will cost and what concentration of sugar in soft drinks will be targeted.

Read more: Sugar tax will cost UK economy £132m and put 4,000 jobs at risk

Under the UK's sugar levy, which was a surprise announcement in the March budget, there will be two bands of tax, assessed on the volume of the sugar-sweetened drinks companies produce or import.

One band will be for total sugar content above five grams per 100 millilitres; a second, higher band for the most sugary drinks with more than eight grams per 100 millilitres.

The Irish beverage industry has hit back at plans for the levy, with the Irish Beverage Council (IBC) claiming in a report last month that a €0.10 tax on sugary drinks would increase a household's annual budget by €60 (£50) each year.

Read more: Evidence from Mexico shows sugar tax won't be a cure for calorie intake

The IBC has also said companies in the Republic would lose out to Northern Ireland-based companies with an overall cost of €60m to the industry if the tax was implemented before the UK's levy comes into effect in April 2018.

Last month, the Treasury launched its sugar tax consultation, which will question the definitions of added sugars and the approach to fruit juices in drinks, the treatment of dilutable cordials and syrups, as well as how to approach mixed products such as slushy drinks, among other topics.