Higher soft drinks prices as a result of the sugar tax have not affected volume sales, but have driven consumers to make healthier choices with one of every 13 soft drinks sold a low sugar alternative.
According to market data from IRI, the two weeks following the introduction of the sugar levy, sales of soft drinks rose in value by £5m to £167m per week. As prices of many soft drinks on supermarket shelves rose, people shifted their soft drinks purchases to low sugar alternatives and water meaning that an additional 7%, 11m litres, of lower sugar soft drinks are being consumed every week.
Pepsi and Coca-Cola are the only brands to experience a small impact in volume, down -2% and -1% respectively, whilst all other major brands have seen a positive impact in volume sales.
In value terms, larger brands have fared well across with Coca-Cola being the standout winner (up £2m a week comparing the pre and post trend). Coca-Cola’s strategy to has been to maintain price parity across full and low/no sugar alternatives but adjust packet sizes to fit the new rules.
The Government’s goal was to raise an additional £500m through the sugar tax to invest in funding sports equipment and breakfast clubs for children as a quarter of children are now overweight when they start school.
The sugar levy comprises two tax bands: 18p per litre (5g of sugar per 100ml) and 24p per litre (8g of sugar per 100ml).