The UK government is considering expanding its sugar tax on fizzy drinks to include milkshakes and other sweetened beverages, as part of new proposals announced in April 2025. The Treasury confirmed it plans to move forward not only with broadening the tax but also with lowering the sugar threshold that triggers it from 5g to 4g of sugar per 100ml.
Authors
- David M. Evans
Professor of Sociotechnical Futures, University of Bristol Business School, University of Bristol
- Jonathan Beacham
Research Fellow, University of Bristol Business School, University of Bristol
The changes, dubbed by critics as the "milkshake tax" , would end the current exemption for dairy-based drinks, as well as plant-based alternatives such as oat and rice milk. Chancellor Rachel Reeves first signalled the potential expansion in the 2024 budget, suggesting the soft drinks industry levy (SDIL), to give it its official name, could be widened to cover a broader range of high-sugar drinks.
Based on our research into dietary change, conducted as part of the H3 project on food system transformation , we see this as a welcome and timely development.
Not everyone shares this optimism. Opponents of what they see as "nanny state" interventionist policies argue that the SDIL has failed to deliver any real improvements to public health. In a UK newspaper's straw poll , for example, 88% of respondents claimed the sugar tax has not significantly reduced obesity rates. Shadow Chancellor Melvyn Stride described the proposed expansion as a "sucker punch" to households, particularly given the ongoing cost of living crisis.
Scepticism around these proposals is not surprising. Many people, regardless of political affiliation, are wary of additional taxation. And indeed, there is evidence suggesting that fiscal tools such as taxes and subsidies can be blunt instruments. They are also often regressive , placing a disproportionate burden on lower-income households.
These concerns are valid - but they don't quite apply to the SDIL.
Crucially, the SDIL is not a tax on consumers. It is levied on manufacturers and importers, who are incentivised to reduce the sugar content of their products to avoid the charge. According to Treasury figures , since the introduction of the SDIL, 89% of fizzy drinks sold in the UK have been reformulated to fall below the taxable threshold.
For instance, the Japanese multinational brewing and distilling company group Suntory invested £13 million in reformulating drinks like Ribena and Lucozade, removing 25,000 tonnes of sugar, making the products exempt from the levy. This means households aren't priced out of soft drinks - they can simply choose reformulated and presumably cheaper versions.
It's true that the UK is still grappling with a serious obesity problem. In England alone, 29% of adults and 15% of children aged two to 15 are obese.
But the SDIL is having an effect. Excessive sugar consumption is consistently associated with rising obesity rates in the UK and globally. There has been a clear reduction in the sales of sugar from soft drinks, and the SDIL is reported to have generated £1.9 billion in revenue since its introduction in 2018.
Early signs suggest health benefits, too. One study found a drop in obesity rates among 10 to 11-year-old girls following the levy's implementation. Another analysis suggests that the greatest health benefits will be seen in more deprived areas, and that it may actually help to narrow some health inequalities for children in England.
Shifting responsibilty
Of course, the SDIL is no silver bullet. There are many contributing factors to the obesity epidemic, ranging from genetic predisposition to "obesogenic" environments - social contexts that promote unhealthy eating and sedentary behaviour, such as areas with a lot of fast food restaurants , limited access to healthy food options and a lack of pavements , parks, or safe places to exercise.
Questions remain about the negative health effects of reformulated drinks, some of which still contain high levels of sweeteners or additives . And in the broader context of the need for food system transformation, focusing solely on soft drinks may be too narrow an approach.
But the SDIL's success lies not just in outcomes but in its design. It shifts responsibility from individuals to industry, encouraging systemic change rather than simply blaming people for making "bad" choices. The government's 2016 announcement of the levy gave manufacturers a two-year head start, allowing them to reformulate and get their products to market before it took effect in 2018.
It's also telling that the idea of taxing milkshakes has sparked such outrage, while most people now accept the high taxation of tobacco. That's because smoking, as a public health issue, has matured : its risks are well understood and widely acknowledged. Obesity, meanwhile, is still catching up, despite posing similar health threats, including as a leading cause of cancer .
In the UK, there's still a strong social stigma around discussing diet and weight. But given the scale and urgency of the obesity crisis, it could be time to overcome this reluctance. Effective change will require bold, systemic policies - not just public awareness campaigns - but multipronged and targeted interventions that reshape the economic and cultural environments in which people make food choices.
Expanding the SDIL may not be a cure-all, but the evidence so far suggests it's a smart step in the right direction.
David M. Evans receives funding from the UKRI Strategic Priorities Fund (grant ref: BB/V004719/1). He is affiliated with Defra (the Department of Environment, Food and Rural Affairs) as a member of their Social Science Expert Group.
Jonathan Beacham receives funding from the UKRI Strategic Priorities Fund (grant ref: BB/V004719/1).
