The government has confirmed that the soft drinks industry levy will be widened to cover a range of sweetened, milk-based drinks, bringing products like flavoured shakes, canned iced coffees and yoghurt drinks into scope. This follows the consultation launched in the spring, which strongly hinted that these items would be next in line for reform.
Producers will be given a lengthy adjustment window, with the changes not coming into force until 1 January 2028. The intention is to give manufacturers time to cut the sugar content of their pre-packaged drinks before the levy applies.
Under the expansion, the lower levy threshold will fall from 5g of total sugar per 100ml to 4.5g per 100ml, roughly equivalent to a level teaspoon of sugar. Research by Action on Sugar has highlighted why the change is being made, noting that some supermarket milkshakes contain up to 42g of sugar per serving. One example is a Muller Milk Frijj, which can include almost 11 teaspoons of sugar in a single bottle.
The government has emphasised that the extension will not apply to drinks made to order in coffee shops, pubs or cafés, as these “open cup” milkshakes will remain outside the levy. Plant-based drinks, including soya and oat products, are also excluded.
Once implemented in January 2028, the broadened levy is expected to generate around £45m a year. Ministers have indicated that a tax incentive will be introduced to encourage manufacturers to reduce sugar levels, although further detail has yet to be provided.
The consultation attracted more than 174 responses, the majority of which supported the move. According to the Department of Health and Social Care, the changes are intended to help combat rising obesity, diabetes, heart disease and cancer, with an estimated saving to the NHS of £36m.
Health secretary Wes Streeting commented: “An unhealthy start to life holds kids back from day one. The levy has already shown that when industry cuts sugar levels, children’s health improves.”
A technical consultation on the draft legislation is scheduled for 2026, with the formal legislative changes to follow in a future Finance Bill. The new rules are planned to take effect from 1 January 2028.
