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

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

Research output: Contribution to journalArticle

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.

Original languageEnglish
Article number100866
JournalEconomics and Human Biology
Volume37
Early online date20 Feb 2020
DOIs
Publication statusPublished - 31 May 2020

Keywords

  • Soda tax
  • Soft drinks industry levy
  • Sugar
  • Tax impact

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)

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