Sugar Tax In UK Forces Coca-Cola To Make Bottles Smaller And Prices Higher

There is increasing fear among consumers in Scotland that its national soft drink – Irn-Bru would be ruined by a new lower sugar version, resulting in a backlash from consumers. And amidst such an environment, Coca Cola is planning to shrink the size of bottles and sell them at enhanced prices instead of changing the famous sugar-laden secret recipe.

These changes have been forced on to makers of fizzy drinks due to sugar tax. In the U.K., the sugar tax is to be implemented in April and therefore there would be a more than 10 percent increase in the price of some “price marked packs” of Coca-Cola that are offered at newsagents and convenience stores.

According to the plans by Coca Cola company, the new bottles would be of 1.5 liters instead of 1.75 liters while its price would be increased by 20p to £1.99. £1.25 from £1.09 would be the change in the price of a 500ml bottle. In last autumn, the price of a half-liter bottle was £1 and the new planned price would see a sharp 25 percent rise in the price of a half-liter bottle.

“We have no plans to change the recipe of Coca-Cola Classic so it will be impacted by the government’s soft drinks tax,” said a spokesman for Coca-Cola European Partners, which is the bottler for Coca-Cola products in western Europe. “People love the taste … and have told us not to change.”

Irn-Bru is a drink that has outperformed Coke and Pepsi in Scotland and the strategy taken by its marker AG Barr is the opposite of Coca Cola. New versions of the drink, also known as “made in Scotland from girders”, would begin to be bottled by the company from next week.

The company will introduce low calorie sweeteners, including aspartame, in the new recipe and hence would contain half as much sugar as earlier. But loyal customers are unhappy.

The then chancellor George Osborne in 2016 was the one to announce the introduction of the sugar tax and was aimed to help reduce child obesity. And for the fizzy drink markers, it wanted to evade the taxes, they need to alter the recipe of the drinks, and for which time was given by Osborne. Those soft drinks that have over 5 grams of sugar in 100 ml of soft drinks would be imposed a levy of 18p per litre. The levy increases to 24p per liter when drink possess 8g of sugar or more per 100ml. The tax would be implemented from April.

The manner in which Coca-Cola Classic would be impacted by the soft drinks tax was being discussed by the company with retailers, Coca-Cola said. “These discussions include reviewing the pack sizes offered to consumers and our approach to price-marked packs,” a spokesman added.

(Adapted from Theguardian.com)

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Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability

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