A lot of fizz: Warning from Face the Facts, Can the Tax group that sugar tax could fuel illicit soft drinks trade

Francesca Washtell
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The soft drinks levy is due to come into effect in 2018 (Source: Getty)

A British soft drinks industry campaign group has brought a whole new meaning to coke today after it claimed the sugar tax could fuel the illegal fizzy drinks trade.

Concerns have arisen from the prospect of a minimum tax threshold for importers, which would permit some product to be imported tax free into the UK.

Read more: TaxPayers' Alliance slams government for its "bungled" sugar tax

While the threshold has yet to be set, the Face the Facts, Can the Tax campaign group has said it could incentivise "rogue traders" to purchase directly form other countries rather than buy taxed products manufactured in the UK.

The group has also raised concerns that with no planned additional resources at UK borders it will be possible for "criminal gangs" to seize commercial advantage.

Dubbed the "sugar tax", it has been widely blasted by industry bodies and companies such as Irn Bru maker AG Barr, which claims the tax will have a minimal effect on sugar consumption, will disproportionately target poorer families and will affect thousands of direct and indirect jobs.

Read more: WHO urges more countries to adopt tax on sugar drinks

The consultation on George Osborne's proposed soft drinks levy, which is due to be introduced in 2018, closes today. The tax will make soft drinks companies pay a charge for drinks with added sugar, and total sugar content of five grams or more per 100 millilitres.

Gavin Partington, director general of the British Soft Drinks Association, today said:

We know from the evidence around the world where they’ve tried a tax that it will not make a difference to levels of obesity. What it will do is damage thousands of UK businesses across the entire soft drinks supply chain, from farmers, to manufacturers, convenience stores and the pub and restaurant trade.

At a time of economic uncertainty the Government needs to be supporting these businesses and working with industry to support actions that are already making a difference, including reformulation, smaller packs and more marketing of the many no sugar options now available. This demands investment and the soft drinks tax puts that at risk.

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