Irish Beverage Council calls for deferral of soft drinks tax
The Irish Beverage Council, the Ibec group that represents soft drinks companies, has published its pre-Budget submission, “All cost – No benefit”. Calling on the Minister for Finance to defer the proposed sugar-sweetened drink tax, the Irish Beverage Council submission highlights that the combination of cross border shopping, uncertain all-island trade post-Brexit and the increasing cost of the weekly shop through new consumer taxes, all threaten to facilitate a ‘perfect storm’.
Irish Beverage Council Director Colm Jordan said: “With the euro in our pockets now buying more against the Sterling, Irish shoppers are increasingly heading North. The Minister for Finance must defer his plan for higher taxes on our weekly shop. We are forecasting that 11% of sugar sweetened drink sales will be lost to cross-border shopping and the unofficial grey market. That amounts to a 30m euro loss to our economy in a full operating year of the sugar tax. This must be seen in context; the soft drink tax will only raise 40m euro.
“In the past 34 months the Department of Finance has changed how much they predict the tax will raise on five separate occasions. The prediction fell 53% between April and July alone. This shows there is uncertainty about how the tax will work.
“Given the fully integrated nature of the supply and production systems for soft drinks across our island, Brexit poses a significant challenge to any sugar-sweetened drink tax design. The loss to the Exchequer and the uncertainty as to how the tax will work, along with the fall-out from Brexit, makes it impossible to design a workable, fair or equitable sugar-sweetened drink tax. It’s a perfect storm, the only logical step is to defer the proposed tax.
“We accept the Government’s sincerity in addressing the complex societal issue of obesity, and we are fully committed to playing our part. Soft drinks companies have been reducing sugar content for 30 years. We took 10 billion calories out of the Irish diet each year between 2005 and 2012, through voluntary sugar reduction. We will go further and continue this investment in innovation, reducing sugar content while increasing our no sugar and low sugar offerings.
“While childhood obesity rates continue to increase, daily consumption of sugar-sweetened soft drinks amongst 11, 13 and 15 year olds fell by 70% between 2002 and 2014 according to the World Health Organisation. With less sugar in soft drinks and fewer children drinking sugar-sweetened drinks daily, the singling out of sugar-sweetened drinks is totally unjustified. This must be acknowledged with a deferral.”