Coffee sector could be next target in sugar tax clampdown
The coffee sector could find itself embroiled in the next sugar clampdown as campaigners and the Government are rumoured to be looking at drinks such as flavoured coffees and milkshakes.
The news comes as the Soft Drinks Industry Levy came into force last week. This means that soft drinks with a total sugar content of above 5g per 100ml are 18p more expensive per litre, and those with 8g of sugar per 100ml will cost 24p more a litre.
However, some sugar containing drinks are exempt from the levy including milk drinks, coffee and fruit juices.
But as the levy came into force Tam Fry, chairman of the National Obesity Forum, told The Sunday Times he blamed the “out of home” sector for dragging its feet.
“Lacing coffee with so much sugar is ridiculous,” he says. He made the call for artificial sweetners to be used instead.
The Government gave two-years notice of the sugar tax giving manufacturers time to act before the deadline. In some cases the move sparked innovation from drinks companies both cutting sugar in existing products and launching new lower sugar lines.
According to the Britvic Soft Drinks Review 2018 the tax sparked “numerous high-profile” product reformulations, innovations and health-led activations. One change has been the rise of low and no-sugar soft drinks with 30% of spend in the foodservice sector coming from such products.
Britvic has removed over 20bn calories from its GB portfolio since 2013 on an annualised basis. It also revealed that 94% of its owned brands (72% of Britvic’s full GB portfolio) are below or exempt from the levy. It has looked at its portfolio of drinks and launched Robinson’s Refresh’d, but decided to retain its Pepsi full sugar variant.
Coca-Cola European Partners did the same retaining its full-sugar variant, but reformulating Coke Zero. It also launched new products including the dairy-free smoothie brand AdeZ and used Stevia, the natural sweetener, to cut the sugar in its Capri-Sun brand.
Using artificial sweeteners was a move that was resisted by some drinks companies.
Cawston Press opposed the use of artificial sweeteners, using only pressed fruit juice to sweeten its sparkling drinks, despite the cost. It has committed to cutting out 300 tonnes of sugar from the fizzy drinks it sells in the UK from April to December, this year alone.
“Artificial sweeteners just aren’t us and mask the taste of our delicious ingredients,” says Cawston Press managing director Steve Kearns.
“In some cases we are upping the fruit juice content by up to four times per recipe. For a small company like ours, that’s an enormous investment.”
Pev Manners, managing director for Belvoir Fruit, also opposed the move to artificial sweeteners.
“At Belvoir we know that sugar improves the taste profile and holds the flavour – we are not prepared to compromise on taste or quality and so we will never use artificial sweeteners in our drinks,” he says.
This was a view backed by Steve Perez, founder and chairman of Global Brands, which produces soft drink Franklin & Sons: “We simply won’t make any changes that compromise taste and wouldn’t opt for any artificial sweeteners. The range is made using 100% natural ingredients. Why would we change this?”
The British Soft Drinks Association says that obesity is a much more complex issue than simply a tax on soft drinks.
“As an industry we recognise we have a role to play in tackling obesity. Soft drink companies have been engaged in a range of calorie reduction initiatives for many years – resulting in a 19% reduction in sugar intake (from soft drinks) since 2013,” it says.
While drinks companies have moved to innovate and respond to the sugar levy, trade association UKHospitality, that has Patisserie Valerie and Caffe Nero as its members, admits that there would be a knock-on effect on small businesses.
“Small and independent coffee shops and cafes often work to small margins and these levies are incredibly onerous. It is possible that the levy will simply increase costs for both customers and businesses, without having the desired effect of reducing sugar consumption and obesity levels,” says Ukhospitality chief executive Kate Nicholls (pictured).
“We would prefer an approach that sees Government and industry jointly promoting healthy attitudes through highlighting the positive steps that have been taken to ensure responsible consumption.”
However, it would seem that this is not a view being taken by the Government if remarks made by a treasury minister to the Evening Standard are anything to go by.
In fact Robert Jenvrik says the Government could extend its new sugar tax to sweetened milkshakes and says that sugary milky drinks are in the Government’s sights.
But it is not the first time that coffee has been highlighted as a sugar issue.
Action on Sugar, the campaign group, has already targeted coffee calling the amount of sugar in hot flavoured drinks in coffee shops chains as “scandalous”.
In February 2016 it published the results of a survey of 131 hot flavoured drinks and found that 98% would have received a red ‘high’ label for excessive levels of sugar. It also found that 35% contained the same amount or more sugar than a can of Coca-Cola.
While the political debate is ongoing and drinks companies wrestle with sugar levels, Edwin Harrison, owner of the Artisan coffee chain, says there has been no immediate price increases from any of its soft drinks suppliers although he believes it is “only a matter of time.”
But regarding coffee he says consumers are more interested in milk alternatives such as almond milk than they are in sugar.
Whatever the sugar campaigners and the Government decides it looks like coffee shops could be caught up in the fall-out.
- Magda Harrison, Co-Founder of Artisan, is a member of the European Coffee Expo Steering Panel. European Coffee Expo takes place at London Olympia, May 22-23. Register here.