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The impact of UK soft drinks industry levy on manufacturers’ domestic turnover

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  • Law, Cherry
  • Cornelsen, Laura
  • Adams, Jean
  • Pell, David
  • Rutter, Harry
  • White, Martin
  • Smith, Richard

Abstract

In March 2016, the UK government announced the Soft Drinks Industry Levy (SDIL) which came into effect in April 2018. In common with the reaction to sugar-sweetened beverage (SSB) taxes in other countries, the SDIL announcement was met with strong industry opposition, with claims that it would harm their profits. The SDIL was designed to incentivise reformulation of SSBs by providing a 2-year delay between the announcement and the enforcement of the levy, and adopting a two-tiered rate based on the sugar content of the drinks. Using interrupted time series analysis, this paper examines how the domestic turnover of UK soft drinks manufacturers changed after the announcement and the implementation of the SDIL. Our results show some evidence of a short-term negative impact of the SDIL announcement on the domestic turnover of the UK soft drinks manufacturers. This effect, however, did not continue post-implementation. These findings suggest that manufacturers were, to a large extent, able to mitigate the effects of levy before it came into effect.

Suggested Citation

  • Law, Cherry & Cornelsen, Laura & Adams, Jean & Pell, David & Rutter, Harry & White, Martin & Smith, Richard, 2020. "The impact of UK soft drinks industry levy on manufacturers’ domestic turnover," Economics & Human Biology, Elsevier, vol. 37(C).
    • Handle: RePEc:eee:ehbiol:v:37:y:2020:i:c:s1570677x19302606
    DOI: 10.1016/j.ehb.2020.100866
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    1. Christina H Buckton & Chris Patterson & Lirije Hyseni & S Vittal Katikireddi & Ffion Lloyd-Williams & Alex Elliott-Green & Simon Capewell & Shona Hilton, 2018. "The palatability of sugar-sweetened beverage taxation: A content analysis of newspaper coverage of the UK sugar debate," PLOS ONE, Public Library of Science, vol. 13(12), pages 1-15, December.
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    2. Goncalves, Judite & Merenda, Roxanne & Pereira dos Santos, João, 2023. "Not So Sweet: Impacts of a Soda Tax on Producers," IZA Discussion Papers 15968, Institute of Labor Economics (IZA).

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