The price of many popular milk-based drinks is set to rise after the government confirmed plans to expand the UK’s sugar tax to cover bottled milkshakes, flavoured milks and
pre-packaged lattes.
Health secretary Wes Streeting told MPs on Tuesday that the soft drinks industry levy (SDIL) will be strengthened as part of a renewed push to tackle childhood obesity. The threshold at which the tax applies—currently 5g of sugar per 100ml—will be lowered to 4.5g following a public consultation, bringing more products into scope.
“We’re expanding the soft drinks industry levy to include bottles and cartons of milkshakes, flavoured milk and milk-substitute drinks,” Streeting said. “This government will not look away as children get unhealthier and our political opponents urge us to leave them behind.”
Milk-based drinks have previously been exempt because of their calcium content, but officials say the high levels of added sugar in many products warrant a rethink. A “lactose allowance” will be introduced so that naturally occurring sugars in milk are not penalised.
The overhaul will not take effect immediately. A technical consultation on draft legislation is planned for next year, with the new rules scheduled to come into force on 1 January 2028.
The SDIL, introduced in 2016 by then chancellor George Osborne, is widely considered successful after prompting manufacturers to reformulate recipes. Government figures suggest the levy has driven a 46% reduction in sugar across affected soft drinks, with nearly 90% of products now below taxable levels.
Currently, drinks containing at least 5g of sugar per 100ml incur an 18p-per-litre charge, rising to 24p for those with 8g or more. The tax applies to packaged drinks sold in supermarkets, but not to beverages prepared and served in cafés, restaurants or bars—meaning high-street lattes and milky coffees remain outside the scheme.
It is not yet clear what the revised threshold will mean for borderline products such as Pepsi, which contains around 4.5g of sugar per 100ml. Manufacturers will again face a choice: reformulate or pay the levy. Photo by vxla from Chicago, US, Wikimedia commons.
