Release Date 16 March 2016

Chancellor George Osborne has announced a new tax on sugary drinks manufacturers as part of today's UK Budget. Soft drinks tax has been the subject of several research projects involving economists at the University of Reading.

Prof Richard Tiffin, Professor of Applied Economics at the University of Reading, said:

"The government has heeded warnings that a tax on consumers will not change consumer behaviour sufficiently to have a significant impact on obesity.

"This is a revenue-raising measure and it is pleasing to see that revenue from the tax will be spent on measures that may have a more significant impact. The measures being proposed are somewhat blunt however, and will probably have the biggest impact on those children and young adults that are already participants in sporting activities, rather than those who do nothing. The evidence base is weak, and we need better understanding of the reasons why people make poor dietary choice to design really effective policies using this new revenue stream.

"The evidence on the impacts of this kind of levy on soft drinks manufacturers is also weak. It is likely that some part of the tax will be passed on to consumers, but it not clear how much. Nor is it clear to what extent the manufacturers will be prepared to reformulate."