Sugar Tax Hike Puts Ribena Lucozade Investment and Jobs at Risk in the UK

The UK government is pressing ahead with proposals to raise the so-called sugar tax on soft drinks, a move that puts tens of millions of pounds of planned investment by the maker of Ribena and Lucozade in jeopardy. Suntory, the Japanese drinks giant behind these brands, has issued a stark warning that increasing the Soft Drinks Industry Levy could result in reduced investment in its Gloucestershire factory and job risks for its 700 UK workers.

The Treasury is consulting on lowering the entry point for the levy from 5g to 4g of sugar per 100ml. Drinks like Ribena, which contains 4.5g per 100ml, would now fall within the taxable bracket. This is despite previous reformulation efforts to comply with the original sugar tax introduced in 2018. The current levy applies a charge of 24p per litre on drinks containing more than 8g of sugar per 100ml and 18p per litre for those between 5g and 8g. Products below the 5g threshold have been exempt until now.

Suntory estimates an additional cost of up to £60 million and argues that a second round of reformulation would be “major disruption for very little credible health gain.” Executives from other drinks manufacturers have echoed these concerns, pointing out that soft drinks now represent only 6.3 per cent of total sugar intake in the UK, compared to biscuits at 7.2 per cent and take-home confectionery at 11.5 per cent. Companies stress that they have led the way with reformulation, while other food and drink categories have escaped equivalent scrutiny.

Should the government forge ahead with the changes, Suntory has threatened to scale back not only investment in the factory upgrade programme but also its contributions to the government’s deposit return scheme aimed at improving recycling. Industry leaders wrote to the Prime Minister warning of “severe consequences” and a negligible impact on public health.

The Treasury defends its stance by highlighting the significant drop—almost 47 per cent—in the average sugar content of drinks since the tax came into effect, and claims that updating the policy could deliver further health and economic benefits. Small producers are expected to remain exempt from the revised levy.

This potential tightening of the sugar tax comes at a fraught time for the sector, as food and drink manufacturers contend with economic headwinds and stretched margins. Firms argue the extra burden could undermine growth and employment, calling into question the proportionality and efficacy of the proposed changes.