Close Menu

Gin and tonic falls foul of sugar tax

Spirits and beer might have benefited from a duty freeze in yesterday’s budget, with wine missing out altogether, but the humble gin and tonic fell victim to Osborne’s sugar tax.

The sugar tax will not come into affect until 2018

Yesterday George Osborne announced his 2016 Budget, freezing duty on beer, cider and spirits, while duty on wine and other alcohol will continue to rise with inflation. However it was Osborne’s new sugar tax that has caught gin and tonic lovers off guard.

From 2018, a new tax will be levied on soft drinks that contain more than 5g sugar per 100ml, with a second tier tax for those that contain more than 8g per 100ml. Pure fruit juice and milk-based drinks are excluded, along with diet versions which contain sweeteners rather than sugar. While intended to tackle childhood obesity, the tax will also affect adult beverages, specifically the gin and tonic.

Typically, tonic water contains 9g of sugar per 100g, which means that the cost of a gin and tonic could increase. Premium tonic water brand Fever Tree is one producer that would fall foul of the sugar tax with its Indian Tonic water containing 8g of sugar per 100ml, placing it in the higher tax category. Its Mediterranean tonic water contains 7.4g per 100ml. Ginger beer, used to make a Dark and Stormy cocktail, will also be affected. Old Jamaica Ginger Beer contains a whopping 15.2g of sugar per 100ml.

Drinks in the higher category, containing over 8g of sugar per 100ml, will be subject to a 24p per litre levy.

The tax will be imposed on drinks companies in two years’ time (2018), giving producers the opportunity to change their ingredients and reduce their sugar content to avoid the tax. It is expected to raise around £520 million, which will be put toward improving sports provisions in primary schools.

Slimline versions will be exempt from the sugar tax, however the internet reliably reacted with mock horror upon the realisation that the gin and tonic could in any way be affected by the changes.

It looks like you're in Asia, would you like to be redirected to the Drinks Business Asia edition?

Yes, take me to the Asia edition No