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Press releases

08 August 2016

Oxford Economics: Cost of saving only 5 kcals per day risks over 4,000 jobs

New report shows we will barely reduce calorie intake from soft drinks tax but will risk thousands of jobs and millions of pounds of investment

New data by global forecasting experts, Oxford Economics, shows the soft drinks tax proposed by the Government in this year’s budget will only lead to a reduction of 5 calories per day – the equivalent to just one bite of an apple - but will risk over 4,000 jobs across the UK.

The report finds that impact of the tax will be felt across the wider economy, particularly in the hospitality sector and amongst smaller retailers. Lower sales will reduce the industry’s contribution to the economy by £132m.

Gavin Partington, BSDA Director General, said: 

“Post-Brexit, securing investment and jobs is more important than ever. This research shows the soft drinks tax is not only ineffective in fighting obesity but will come at a significant price for the economy, costing thousands of jobs. 

“As an industry we recognise that obesity must be tackled which is why we have invested heavily in reformulating drinks. Since 2012 this has led to a 16% reduction in sugar intake from soft drinks. The tax is therefore unnecessary and harmful to our economy.”

Nick Stewart, Senior Economist at Oxford Economics said of the figures:

“Early indications are that the soft drinks tax will lead to over 4,000 job losses across the UK. The impact will be felt across the wider economy, predominantly in hospitality and smaller retailers. These are significant losses considering we estimate the tax will only lead to a reduction of just 5 calories per person, per day.”

According to BSDA’s recently published 2016 annual report “Leading the Way”, every soft drink category has contributed to reducing sugar intake, most notably carbonates (17%) and dilutables (35%).  Sales of bottled water continue to rise (8% in 2015) and smaller pack sizes have increased by over a quarter (26.5%) since 2011.

In 2015 the soft drinks sector became the only food and drink category with an ambitious plan to reduce calorie intake from its products by 20% by 2020.

The industry has also committed not to advertise regular soft drinks to children under 16, across all media channels, including online.

Gavin Partington added: “The international evidence has shown that there is no evidence worldwide that food taxes have an impact on levels of obesity”.

“By contrast Industry efforts to help consumers cut sugar intake are working, with calories from soft drinks now down 16% since 2012 through smaller portion sizes and reformulated drinks.”

The full Oxford Economics report is available here which highlights the regional breakdown, showing London and the South East bearing the brunt of job losses with smaller retailers and convenience stores losing 500 jobs. 

For further information please contact:

Jacqueline Wall
Communications Manager
British Soft Drinks Association
Tel: 020 7025 3710 / 07809 338 846
Email: jwall@britishsoftdrinks.com
Website: http://www.britishsoftdrinks.com/

Notes to Editors

1. The 2016 UK Soft Drinks Report Leading the way can be found here

2. The 2014 McKinsey Global Institute report, which is one of the most comprehensive and wide-ranging global studies on the issue, found that a 10% tax on high-sugar and high-fat products in the UK would be ten times less effective than reducing portion sizes and eight times less effective than reformulation of products. http://www.mckinsey.com/insights/economic_studies/how_the_world_could_better_fight_obesity   Public Health England ‘Sugar reduction: the evidence for action

3. The new soft drinks industry levy is forecast to cost the taxpayer £1 billion in its first year http://cdn.budgetresponsibility.org.uk/March2016EFO.pdf (page 8)

4. Of the total forecast job losses of 4,030 total, the number of off trade jobs expected to be lost is 1,988 comprising of:

  • 746 – major retailers
  • 500 – small shops/convenience stores
  • 369 – supply chain such as delivery/distribution
  • 373 – induced jobs (jobs generated by off-trade economic value)

5. Total On-trade job losses (Pubs, clubs, restaurants) is forecast to be 1,775 in total.

 6. Manufacturing supply chain (drinks producers, ingredient manufacturers) job losses are forecast to be 268.