The UK Health forum is a founding member of the Obesity Health Alliance. ... This evaluation should include analysis of
UK Health Forum Response to Department of HM Treasury Consultation on Soft Drinks Industry Levy Date: Contact: Dr Modi Mwatsama, Director of Policy and Global Health Email:
[email protected] Phone: 020 7832 6920
(Q1b) About the UK Health Forum The UK Health Forum (UKHF), a registered charity, is both a UK forum and an international centre for the prevention of non-communicable diseases (NCDs) including coronary heart disease, stroke, cancer, diabetes, chronic kidney disease and dementia through a focus on up-stream measures targeted at the four shared modifiable risk factors of poor nutrition, physical inactivity, tobacco use and alcohol misuse. UKHF undertakes policy research and advocacy to support action by government, the public sector and commercial operators. As an alliance, the UKHF is uniquely placed to develop and promote consensus-based healthy public policy and to coordinate public health advocacy. The UK Health forum is a founding member of the Obesity Health Alliance.
Our summary position1
The UK Health Forum warmly welcomes and supports the introduction of the soft drinks industry levy. UKHF agrees that penalties are an important measure to encourage manufacturers and importers to comply and create a level playing field and welcomes HMRC’s commitment to ensuring that the levy is enforced. We encourage the Government to fund and publish an independent, rigorous evaluation of the soft drinks levy so that it can be refined and adjusted to continually deliver public health gains. This evaluation should include analysis of consumer retail data (including products not included such as fruit juices and milk based drinks).
Q5.a - Do respondents agree that a definition of ‘added sugars’ as set out in the consultation is sufficient to capture the types of sugar commonly added to soft drinks?
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We accept the definition of added sugars as set out in the consultation. We broadly support the exclusion of unsweetened 100% fruit juices from the levy. However, the latest guidance from PHE and the School Food Standards is that consumption of these products should be limited to a maximum of 150ml per day (due to the levels of free sugars and associated contribution to excess sugar intakes).i The Department of Health and Public Health England should push manufacturers to reduce single-serve products to 150ml unsweetened pure fruit juice in line with the above recommendations. The experience in schools demonstrates that this is technically feasible as manufacturers and brands have developed 150ml unsweetened pure fruit juice single-serve products for schools which have not impacted on children’s enjoyment, and have also been welcomed by parents.
We have answered selective questions to this consultation in line with our public health expertise.
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Q5.c – Do respondents agree that the Fruit Juices and Fruit Nectars (England) Regulations 2013 provide a reasonable reference point for legislation which achieves the aim of keeping pure fruit products outside of the scope of the definition of added sugars?
There is a risk that excluding fruit juices from the levy may result in i) an increase in the use of fruit juices as soft drink sweeteners by manufacturers, ii) an increase in consumption of fruit juices by children and iii) no net reduction in sugar consumption among children. We urge that these risks are closely monitored and publicly reported as potential unintended consequences of the proposed exclusion. We fully support the inclusion of fruit nectars within the scope of the levy as these are products to which sugar or sweeteners may be added.
Q6 – Would requiring liable producers and importers to pay the levy on cordials and dilutables at diluted volumes present reporting or compliance problems for particular businesses? If so, please provide evidence and suggest any alternative approaches.
We support the proposal to include cordials and dilutables within the scope of the levy at a rate in line with the recommended dilution levels indicated on product packages. The recommended dilution ratio used to determine liability to the levy is something which should be independently verified to prevent abuse. In addition, ongoing monitoring of consumption of dilutables will be vital to ensure that consumers do not compensate for the reduction in sugar by increasing the volume of the concentrate. This data should be made publicly available.
Q7 – Respondents are invited to submit views on the treatment of liquid drinks flavourings as regards the soft drinks industry levy.
We support the inclusion of liquid flavourings in the levy as these can be a source of added sugars in soft drinks.
Q8 – Do respondents agree that a minimum proportion of 75% milk is necessary to ensure that only nutrient-rich milk drinks are exempt from the levy? If not, what alternative test or treatment would you propose and why?
We do not support the proposal of exempting drinks with a minimum proportion of 75% milk as we believe this proportion is too low. The levy should adopt the treatment within the School Food Standards and stipulate that only milk drinks with under 5% added sugar should be exempt.ii Many milk drinks with more than 5% added sugar are marketed at and consumed by children. If such drinks are not included in the levy, there is the risk that as a consequence of the SDIL i) marketing to children of these high sugar drinks will increase and ii) consumption of these high sugar drinks will increase, resulting in no net reduction (or the risk of a possible rise) in consumption of sugars among children. It would make sense for the SDIL to be aligned with the School Food Standards as both measures are included within the cross-government childhood obesity plan. Moreover, should the School Food Standards approach to milk drinks be further tightened at a later date, the levy criteria should be updated to reflect such a change.
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We outline additional evidence in support of this recommendation as summarised by the Children’s Food Campaign: a) School Food Standards approach to milk-based drinks:
The School Food Standards are clear that drinks with more than 5% added sugars or honey are considered ‘less healthy’ and thus are not allowed to be served to children at any time during the school day.
In the context of dairy drinks which are other than just pure milk, the Standards define ‘healthier drinks’ as: “combinations of fruit juice and lower fat milk or plain yoghurt, plain soya, rice or oat drinks enriched with calcium; cocoa and lower fat milk; flavoured lower fat milk, all with less than 5% added sugars or honey.”
The School Food Standards were drawn up by an Expert Panel, with guidance from academics and Public Health England, and were passed into law after an extensive public consultation. It would make sense both from the evidence and out of consistency to use the same definition for the Levy.
Manufacturers have shown that they are able to work out which of their drinks are under the 5% threshold (i.e. compliant with the Standards, and thus able to be sold into schools) and which are not. They have also been incentivised by the Standards to reformulate existing products or bring out lower or no added sugar products which are compliant.
Thus there is an existing, evidence-led, and effective definition of which milky drinks to include in the levy: the 5% added sugar threshold used by the School Food Standards. The Standards also have a maximum portion size of 330ml for such drinks to be served/sold in schools. PHE/DH should work with industry to encourage these criteria to be applied across the board for singleserve packaging. b) Manufacturers acknowledge that added sugar products should be classed as treats:
Leading industry players, including Yazoo, themselves admit that added-sugar flavoured milk products are “treat” items, not an integral part of a child’s diet, and not for “regular” consumption.
Yazoo confirmed they were launching no-sugar variants: “to create a milk drink that 8 million families would want to buy regularly, rather than just as a treat.” http://www.fdin.org.uk/2016/08/yazoo-releases-new-no-added-sugar-milk-drink/
When manufacturers themselves admit that their added-sugar products should be classed as treats, it seems logical that these drinks should be included in the Soft Drinks Industry Levy. By not including, for example milk drinks with more than 5% added sugar, this will be an implicit signal from government that they can be consumed regularly without negative health effects.
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Q10 – Do respondents agree with the proposed treatment of candy sprays, ice lollies, and dissolvable powders?
UKHF supports the inclusion of candy sprays within the scope of the levy. These products are composed of sugar sweetened soft drinks, frequently with significant added sugar content. The Obesity Health Alliance has found examples of products where candy spray contained 31grams of sugar in a single servingiii which was three times more sugar per 100g than when sold in a bottle with very similar ingredient profile.iv In addition some candy spray products are marketed under the same brand as popular sugar sweetened soft drinks and represent an opportunity for brands to build brand loyalty with children. Dissolvable powders should also be included within the scope of the levy. They should be treated the same as liquid drink flavourings (Q7), as their purpose and use is similar.
Q13 - Respondents are invited to submit any evidence that the final levy design could have potentially adverse impacts on groups with protected characteristics.
The UKHF agrees with the conclusions of the impact assessment that adverse impacts on groups with protected characteristics will be negligible. The benefits of the soft drinks industry levy will accrue to all groups as a result of the ensuing product reformulation by soft drinks manufacturers to reduce sugar as well as the nudge to consumers towards healthier choices. The levy also has the potential to address broader inequalities, as children from the most deprived groups are significantly more likely to be overweight or obese than their peers from affluent backgrounds.v
Q20 – Do respondents agree products which are given away free of charge should still be liable to the levy? If not, please provide examples of where relief may be appropriate and why.
UKHF strongly supports the proposal to include products which are given away free of charge in the levy. Free products samples are an established marketing technique and protecting children from marketing of unhealthy food and drinks products was identified as a priority intervention for sugar reduction within PHE’s sugar evidence review.vi Exempting free products from the levy would create a loophole in which sugary drinks could be marketed to children.
Q22 – What is the best model for achieving the small operator policy intent - a production exemption for small operators or a small universal relief?
Ideally, there should be no exemptions at all. If the policy intent is the protection of (children’s) health, then the logical and consistent approach is to apply the levy to all drinks which fall into the scope of the levy, irrespective of who has produced them.
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If a model is adopted for a small operator policy intent, we agree that HMRC should be given the necessary resources and powers to effectively monitor company structures within the soft drinks industry, to ensure that corporations do not split up into a multitude of smaller entities in order to gain exemptions from the levy.
Q25 – Should added sugar soft drinks imported into the UK for consumption while travelling internationally be exempted from the levy, provided evidence is provided that the drinks have left the UK? If not, why?
No these products should not be exempted from the levy. There should be consistency of approach for UK importers and manufacturers regardless of where the products end up being consumed. Such an exemption would create a loophole and send a mixed message.
Q29 – Do respondents agree that producers of soft drinks should include all of the drinks they produce which are liable to the levy (UK markets and exports) when determining their eligibility for relief as a small operator?
Yes – including all of the drinks produced is a consistent and fair approach. This will also prevent the potential for a regulatory loophole which bigger manufacturers could exploit.
Q40 – Do respondents agree that the above proposals for compliance and penalties are appropriate?
UKHF agrees that penalties are an important measure to encourage manufacturers and importers to comply and create a level playing field. We support the proposals for compliance and welcome HMRC’s commitment to ensuring that the levy is enforced.
Q43 – Do respondents have any other concerns or suggestions around potential compliance risks? Evaluation The UK Health Forum warmly welcomes the introduction of the soft drinks industry levy. In order to ensure it has the greatest impact on protecting children’s health, it is vital that it is evaluated so that it can be refined and adjusted to continually deliver public health gains. We encourage the Government to fund and publish an independent, rigorous evaluation of the soft drinks levy. This evaluation should include analysis of consumer retail data (including products not included such as milk based drinks) and analysis of consumption trends.
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We support the Obesity Health Alliance’s recommendations that the following should be part of the remit of the evaluation:
An examination of consumer retail data to examine changes in trends and sales of SSBs, products not covered by the levy including likely substitutes and complements, and changes in retail prices of the above products.
An examination of consumption data trends for SSBs using existing datasets such as dietary surveys and additional relevant information like the Wales Public Health Outcomes Framework.
A review of the soft drinks industry practices in response to the levy including action on reformulation as a result of the levy, product size changes, pricing strategies, and marketing and promotional activities.
A review into consumer attitudes towards the levy and sugar consumption to understand consumer behaviour in response to the levy.
Increasing the effectiveness of the levy Evidence from other countries with similar taxes suggests that these types of tax are most effective when there is a price differential between products that are subject to the tax compared to those that aren’t at the point of sale.vii Therefore, for the levy to be even more effective in protecting children by reducing their consumption of sugary drinks, we recommend the following measures:
Consider adjusting the higher rate of the levy so it increases incrementally in line with the sugar content.
Consider committing to adjust the rates of the levy in line with consumption.
In summary, UKHF fully supports the soft drinks industry levy and is pleased the Government has taken this bold and important first step to protect the future health of children. The expenditure of the levy’s revenue: We support the Children’s Food Campaign’s recommendation that some of the money earmarked in England for the provision of after-school activities and extending the school day should be spent on activities which support pupils’ food education, increase their cooking skills and build on the sugar reduction messages, actions of the School Food Standards and the levy itself.
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i
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/551502/Eatwell_Guide_boo klet.pdf ii The School Food Standards (2016). http://www.schoolfoodplan.com/wpcontent/uploads/2015/05/School_Food_Standards_140911-V2e-tea-towel.pdf iii Vimto double candy spray. Information taken from: http://www.vimto.co.uk/novelty.aspx#candyspray iv Vimto original still. Information taken from: http://www.vimto.co.uk/still.aspx#vimtoOriginal v Public Health England (2016) ‘Health Inequalities’ http://www.noo.org.uk/NOO_about_obesity/inequalities vi
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/470179/Sugar_reduction_T he_evidence_for_action.pdf vii Ref TBC
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