The UK Soft Drinks Levy

A case study

At a glance

Obesity is a major public health challenge that affects almost every country in the world. Cutting the amount of sugar in sweetened drinks is a potential route to reducing obesity.

We used our expertise in intervention design to shape how a Soft Drinks Levy should be implemented in the UK, with a focus on incentivising manufacturers to reformulate their drinks to reduce sugar levels.

Thanks to the levy, the total sugar in soft drinks in the UK decreased by 35.4% from 2015 to 2019 - the equivalent of removing 47,000 tonnes of sugar from shelves each year. Since then, at least 50 other countries have implemented similar levies on sugary drinks to incentivise reformulation.

"This project was a true collaboration between many departments. What made it unique was that all the actors were united around the wish to think innovatively. Combining economic, psychological and public health perspectives led to a new take on tax that had influence around the world."

Michael Hallsworth, Chief Behavioral Scientist, BIT

The challenge

Obesity is a major public health challenge, with the number of people living with the condition more than doubling between 1990 and 2022 worldwide. In England, almost three quarters of adults are living with excess weight and obesity.

A behavioural lens reveals that our eating habits are shaped by our environments. That means interventions aimed at incentivising people to change what they do (like dieting) are less likely to be effective in the long term than those that aim to harness the power of the system itself by making a targeted change to the environment in which we consume food.

What we did

BIT partnered with the Department of Health and Social Care and Public Health England to design a targeted change to one part of the system - a new tax that would reduce sugar levels in soft drinks. We advised on the design of the tax, which was to be applied to UK manufacturers and importers of soft drinks containing added sugar.

Our team’s expertise in public health, policy and human behaviour were essential in designing this intervention. For example, we made it clear that the aim of the tax was to encourage manufacturers to change their behaviour - in this case, to reformulate their recipes and remove sugar - rather than to make those drinks more expensive for consumers.

If soft drinks had less sugar in them, then consumers could buy the same products, but face fewer negative health effects.

We used sales data to pinpoint the sugar content levels in market-leading products. Using these as a guide, we recommended that the tax be based on sugar content, not volume, to incentivise reformulation by manufacturers.

In its final form, the tax came in three tiers so that higher levels of sugar content would result in higher taxes. This gave manufacturers a clear incentive to make their products healthier.

No levy on soft drinks containing less than 5g of sugar per 100ml.
18p per litre on soft drinks containing between 5g and 8g of sugar per 100ml.
24p per litre on soft drinks containing more than 8g of sugar per 100ml.

Manufacturers were given sufficient lead time before the levy went into effect. That way, they could adjust their recipes to ensure that consumer price and quality would not be compromised before reformulated products went to market. Making this industry-level behaviour change achievable was paramount to the success of the tax.

What we did

BIT partnered with the Department of Health and Social Care and Public Health England to design a targeted change to one part of the system - a new tax that would reduce sugar levels in soft drinks. We advised on the design of the tax, which was to be applied to UK manufacturers and importers of soft drinks containing added sugar.

Our team’s expertise in public health, policy and human behaviour were essential in designing this intervention. For example, we made it clear that the aim of the tax was to encourage manufacturers to change their behaviour - in this case, to reformulate their recipes and remove sugar - rather than to make those drinks more expensive for consumers.

If soft drinks had less sugar in them, then consumers could buy the same products, but face fewer negative health effects.

We used sales data to pinpoint the sugar content levels in market-leading products. Using these as a guide, we recommended that the tax be based on sugar content, not volume, to incentivise reformulation by manufacturers.

In its final form, the tax came in three tiers so that higher levels of sugar content would result in higher taxes. This gave manufacturers a clear incentive to make their products healthier.

No levy on soft drinks containing less than 5g of sugar per 100ml.
18p per litre on soft drinks containing between 5g and 8g of sugar per 100ml.
24p per litre on soft drinks containing more than 8g of sugar per 100ml.

Manufacturers were given sufficient lead time before the levy went into effect. That way, they could adjust their recipes to ensure that consumer price and quality would not be compromised before reformulated products went to market. Making this industry-level behaviour change achievable was paramount to the success of the tax.

The impact

The Soft Drink Industry Levy was announced in 2016. It made an impact before it was put into effect two years later. Almost a fifth of drinks that were above the 5g per 100ml sugar threshold when the tax was announced had dropped below it 50 days before implementation in 2018.

The total sugar in soft drinks decreased by more than 35% from 2015 to 2019 - the equivalent of removing 47,000 tonnes of sugar from UK shelves each year. Industry’s long-term profitability went unharmed. In fact, total soft drinks sales increased by nearly 15% during the same time period.

The tax served as a powerful strategy to help curb childhood obesity as well. A study published in PLOS Medicine found that the sugar tax was followed by a reduction in obesity cases among older primary school children. Their estimates suggest that more than 5,000 cases of obesity in 11-12 year old girls were prevented, with the greatest effects in less affluent areas.

We believe the sugar tax has also influenced food environments beyond the UK. At least 50 other countries have implemented similar levies on sugary drinks to incentivise reformulation.

We are proud that BIT’s unique expertise was able to bring industry and government together to enable systems change on a national and global scale.

What we learnt

Focus on systems-level change

The most effective interventions are not always those that target individual behaviour. The tax did not focus on shifting purchases through changing incentives at the individual level. Rather, it aimed at creating a system change in the way that drinks were formulated - thereby sidestepping the challenge of trying to change individual behavior.

Create an alternative to punishment

By creating a tiered tax based on sugar content, we gave companies a clear financial incentive to reformulate their products and avoid the tax. That gave companies a choice: they could raise consumer prices if they decided but they were not compelled to do so.

Provide a clear path for change

The levy did not go into effect immediately. That delay was crucial, since it gave manufacturers time to adjust their recipes and supply chains without compromising their profitability or consumer experience.