ACS Urges Government To Rethink Sugar Tax Plans

The Association of Convenience Stores (ACS) has called on the Government to focus on tackling obesity through a partnership approach with retailers and suppliers, rather than instead of imposing a tax on soft drinks.

Responding to the government’s consultation on the introduction of the levy, the ACS outlined a number of key concerns in its submission:

  • Smaller retailers are potentially going to be disproportionately affected by increased costs as a result of the introduction of the levy, as larger retailers have greater market share and trading leverage
  • There is limited evidence that a levy on soft drinks manufacturers would reduce soft drink consumption and reduce childhood obesity
  • The introduction of a levy on soft drinks has the potential to create an illicit market for the category, similar to the alcohol and tobacco markets where duty is applied

ACS chief executive James Lowman commented: “Convenience stores are already playing an important role in addressing the issue of obesity by increasing their ranges of healthy and fresh foods. We are concerned that a levy on soft drinks manufacturers will result in increased costs for retailers, as the manufacturers pass on the levy through the supply chain. Smaller retailers do not have the buying scale to resist these costs being passed on to them, whereas large multiple retailers can push back against additional costs caused by exchange rate changes, production cost increases, or the introduction of a levy like this. We fear that the sugar levy will disproportionately impact smaller retail businesses.

“We do not believe that a soft drinks levy will be an effective measure in reducing consumption, and encourage Government to continue to work with suppliers and retailers on a partnership approach instead of this particularly blunt piece of regulation.”

Soft drinks represent 5.5% of sales value in the convenience sector.