Clearly, one of the issues we face as a society is obesity, and specifically childhood obesity. It’s an issue that occupies the minds of everybody in the food and drink industry, and as a manufacturer we want to help people make good choices about what they eat and drink.
We launched Diet Coke almost 30 years ago, before people were talking about obesity, when people talked about calories and Jane Fonda workouts. And really, we launched Diet Coke back then because we read consumer sentiment: people increasingly wanted a low- calorie option. Diet Coke went from a tiny part of the business in the UK to almost half of the cola we sell today, along with the other no-sugar Coca- Cola we make, Coca-Cola Zero Sugar. Most soft drinks manufacturers have been reducing sugar in their drinks, and that’s reflected by the market: between 2004 and 2014 sales of full-sugar soft drinks fell by 44 per cent. And yet, in the same period, obesity rates increased by about four per cent. So it’s pretty hard to argue that soft drinks are the sole cause and need special attention.
Further research, from the analysts at Kantar, says firstly that soft drinks contribute less than three per cent of the total calories in the UK diet, and secondly that the sugar coming from soft drinks purchases has fallen by 16 per cent since 2012. The decline in full-sugar soft drinks over the past 10 years has been massive, a double-digit decline in four years – but total sugar consumption has fallen much more slowly, and in the last few years it’s been broadly flat.
Why is this happening? I can’t speak for the rest of the industry, but I can say why sugar from soft drinks is declining. We’re in a competitive business, and we win by offering consumers the drinks that they want: better tasting, lower- sugar variants. Consumers are increasingly aware of their diets, and zero-sugar alternatives are widely available and competitively priced.
It doesn’t seem logical to create a tax that focuses on only some of the sugar we consume. It’s targeted specifically at soft drinks (and even then not all soft drinks, with milkshakes and coffee- drinks being exempt) – the one category which has reduced sugar significantly. Why target the one success story that has already cut sugar by 44 per cent?
Sugar taxes have been tried in other countries, without much success. The soft drinks tax in Mexico gets talked about most often. On average, it reduced Mexicans’ daily calorie intake by just six calories per day. In the UK, Oxford Economics has predicted that the levy will reduce calories by on average five calories per person per day. Five calories is a bite of an apple. Coca-Cola has been in the UK for more than 100 years. The work we do across our 11 sites, including our six manufacturing plants, from East Kilbride in Scotland to Sidcup in Kent, delivers £1bn in revenue to the Exchequer, mainly through VAT and corporation tax. With our bottler partner, we employ 4,000 people in the UK, and for every one of our employees, we create eight further jobs through our supply chain. We invest about £50m a year in our operations here and spend around £800m a year with 8,500 UK suppliers, from farmers to packaging suppliers. All of this is made less affordable by the tax. Ultimately the sugar tax is a hugely expensive and damaging policy. As someone involved in running a very large business I’m not interested in symbolic gestures, but in trying to make a real difference in the real world. To me this is reformulating and launching new lower or no sugar drinks – as we’ve done with 28 drinks since 2005, and using our marketing to attract people to lower-calorie alternatives. These are difficult, expensive measures, they take large numbers of people working around the UK to implement and they create real results: the sugar tax will only make this investment harder.
For more on the Sugar Tax, search #canthetax.
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