Budget 2016: Is sugar tax likely to leave a bad taste in retailers’ mouths?

Budget 2016: Will sugar tax leave a bad taste?

UK Head of Retail at KPMG, David McCorquodale, comments on the new soft drinks industry levy to encourage companies to reduce the amount of sugar in drinks they produce.

Also on KPMG.com

Commenting on the announcement that the Chancellor has introduced a new soft drinks industry levy to encourage companies to reduce the amount of sugar in the drinks they produce, UK Head of Retail at KPMG, David McCorquodale said:

“With the estimated cost of obesity to the UK economy standing at £27bn, taking steps towards reducing sugar consumption in young people is clearly a priority for the Government. However for retailers the introduction of a new “sugar tax” will mean increases in costs which they then may choose to pass on to consumers.

“It is unclear whether education, regulation or a tax will be the cure for obesity, but for retailers, the introduction of a levy may seem heavy handed when there are various other options to explore.  Regulation, for example, could be a step in the right direction, with quotas imposed on soft drinks to not exceed a certain level of sugar/ calories. Many in the retail industry may therefore feel announcing a tax on sugary drinks before further consultation, could be perceived as premature.”


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For further information please contact:

Angela Pink, KPMG Corporate Communications

M: +44 (0)7500 100 257

E: Angela.pink@kpmg.co.uk

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Tel: +44 (0)207 694 8773

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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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