Sugar tax could cost convenience retailers £8.1k in soft drink sales

Independent retailers risk losing up to £8,100 in soft drinks sales every year as a result of the proposed sugar tax, according to an impact study.

A report from the Economic and Social Research Council predicts the sugar levy could cause soft drinks sales to fall by as much as 15% following the introduction of legislation in 2018.

IGD figures from 2015 show soft drinks were the fifth biggest category for more than 46,000 independent, symbol and convenience retailers, worth £2.5bn.

With soft drink sales accounting for around £54,000 a year per store, RN has calculated a 15% decline in sales would equate to a loss of £8,100 per shop per year.

Jackie Wall, communications manager at the British Soft Drinks Foundation, said: “The government expects the tax to be passed entirely onto consumers. If retailers do this, estimates suggest it would add 48p to a two litre bottle of soft drink – effectively a 50% tax. This is a risk for independent retailers.”

Meanwhile, research conducted by the British Medical Journal found a 10% tax on sugary drinks in Mexico led to a 12% reduction in soft drink sales. A similar result in the UK could cause independent stores to lose £6,480 every year.

Londis retailer Sandip Kotecha said: “This is a concern – we may have to swallow some of the margin if prices go up.”

Adrian Roper, head of public affairs at the NFRN, added: “Retailers are suffering from a range of other costs and this is just another interference to them doing their business.”

Manufacturer Lucozade Ribena Suntory said it was “on track” to reduce calories in its soft drinks by 20% per 100ml in the next nine years, while Coca-Cola European Partners (CCEP) added it is investing £30m to lower sugar levels by 2017.

A CCEP spokesman said: “A soft drinks tax is regressive; it penalises consumers by making them pay more.”