IRN Bru manufacturer AG Barr has raised concern about the Chancellor's surprise sugar tax on soft drinks which caused its share price to tumble by more than five per cent.
George Osborne has announced he is to impose the levy which will raise £520m to be put towards primary school sports, approximately doubling existing funding. It is due to come into effect in two years' time.
AG Barr chief executive Roger White said: "It is extremely disappointing that soft drinks have been singled out given it is the only food and drink category to have made any real progress in reducing sugar intake in recent years down 13.6 per cent since 2012."
Everything you need to know about the soft drink sugar tax levy
On the sugar levy, Mr Osborne told MPs: "Doing the right thing for the next generation is what this government and this Budget is about.
"No matter how difficult and how controversial it is.
"You cannot have a long-term plan for the country unless you have a long-term plan for our children's health care."
The Budget 2016: Osborne announces major tax cuts for oil and gas industry
At a glance: everything you need to know about the Budget 2016
He added: "I am not prepared to look back at my time here in this Parliament, doing this job and say to my children's generation, I'm sorry.
"We knew there was a problem with sugary drinks and we knew it caused disease but we dumped the difficult decisions and did nothing.
"Today, I can announce we will introduce a new sugar levy on the soft drinks industry."
Mr White added: "At AG Barr we have reduced the average calorific content across our brand range by 8.8 per cent in just four years and are actively contributing to the soft drinks industry-wide five year target to make a 20 per cent reduction by 2020.
"We will await further details and ensure that we are full involved in the consultation process to ensure our position, and progress to date, are well understood."
Budget sketch: Tory MPs cheer Osborne - and Corbyn
Seven things we learnt from the Budget 2016
AG Barr's share price dropped by 5.4 per cent in the immediate wake of the announcement.
There will be two bands of tax assessed on the volume of the sugar-sweetened drinks companies produce or import.
One band will be for total sugar content above 5 grams per 100 millilitres; a second, higher band for the most sugary drinks with more than 8 grams per 100 millilitres.
Budget 2016: the winners and losers
"Pure fruit juices and milk-based drinks will be excluded, and we’ll ensure the smallest producers are kept out of scope," Osborne said, adding that the government will consult on implementation.
In January, the Cumbernauld-based producer of Irn Bru, Strathmore water and Rubicon, said it expected revenue to decline by about 1.5%, to £257m, for the year to January 30.
Last year, Roger White, the chief executive of AG Barr took a swipe at supermarkets’ vilification of soft drinks as part of the ongoing so-called war on sugar.
He complained that soft drinks have been made the enemy of health food campaigners while the makers of sugar-laden snacks had not been targeted in the same way.
Mr White claimed that the drinks industry had been working hard to provide “ready alternatives and sugar-free products, whereas if a customer wants a cake or a chocolate bar there are no sugar-free alternative to cakes or chocolate”.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel