**Sugar Tax Set to Expand to Milkshakes and Lattes in Wales: Government Weighs Wider Levy**
The well-known ‘sugar tax’ on soft drinks may soon be extended to include a wider range of beverages in Wales, as both the UK and Welsh governments consider new proposals aimed at reducing excessive sugar consumption. This move, which follows a government consultation launched this spring, could see drinks such as milkshakes, flavoured milks, and ready-to-go lattes subject to the same levy as traditional fizzy drinks.
The sugar tax, formally known as the Soft Drinks Industry Levy (SDIL), was introduced across the United Kingdom in 2018. It is applied to pre-packaged drinks containing significant amounts of added sugar, including those sold in cans and cartons in supermarkets. The primary goal was to encourage manufacturers to reduce sugar content in their products in a bid to tackle rising levels of obesity and related health issues.
When first introduced, the SDIL notably excluded milk-based drinks due to concerns over calcium intake, particularly in children. At the time, policymakers wanted to ensure that important sources of dietary calcium were not discouraged by the new tax. This exemption also extended to non-dairy alternatives like oat or rice-based drinks.
However, in the Autumn Budget 2024, the government signalled its intent to reconsider these exemptions. New proposals set out in the recent consultation include reducing the sugar threshold at which the levy applies from 5g to 4g per 100ml. This means more drinks with moderate sugar contents could come under the scope of the tax.
Should these changes be implemented, around 200 pre-packed milk-based drinks currently available on the market would be affected unless manufacturers take steps to lower their sugar content. Analysis conducted for the government suggests that without reformulation, these products could become significantly more expensive for consumers.
The consultation covers three key areas: firstly, to lower the minimum sugar content threshold for the SDIL from 5g to 4g per 100ml, with the standard rate then applying to drinks up to 7.9g per 100ml. Secondly, the removal of the exemption for milk-based drinks would come with a new ‘lactose allowance’ to account for naturally occurring sugars in the milk component. Finally, the proposal seeks to remove the exemption for milk substitute drinks, particularly where added sugars are involved beyond those naturally present in the main ingredient.
Speaking on the proposals, Home Secretary Yvette Cooper emphasised that the primary motive was to protect child health. “We are making sure we are taking practical, sensible measures to improve the health of our children,” she told the BBC.
The Treasury has also pointed out evidence suggesting that only a small fraction—around 3.5%—of young people’s calcium intake comes from flavoured milk-based drinks. According to officials, this raises questions about whether the nutritional benefits of continuing the exemption outweigh the public health risks associated with excessive sugar consumption.
Extending the SDIL, Treasury officials argue, would also create a financial incentive for manufacturers to cut sugar levels further and continue reformulating products, building on the significant progress already seen in recent years.
The consultation process will remain open until 21 July, giving manufacturers, health campaigners, and the public an opportunity to contribute their views. This period of public engagement will be crucial in shaping the final policy.
Despite these health-focused intentions, industry bodies such as the Food and Drink Federation have highlighted their ongoing efforts to reduce sugar voluntarily. According to the group, sugar content in soft drinks has fallen by 46% over the last five years, with a notable 30% reduction in pre-packed milk-based drinks over the past three. They warn, however, that the sector is already facing considerable inflationary pressures, and argue the government should continue to support innovation within the industry.
As the consultation unfolds, the outcome could have significant implications for manufacturers, retailers, and consumers across Wales and the broader UK. Whether the proposed changes will strike the right balance between public health and economic stability remains to be seen, but it is clear that reining in excess sugar intake continues to be a policy priority.