(qlmbusinessnews.com . Wed 26th Nov, 2025) London, UK —
Cutting Sugar Consumption: How the 2028 Milkshake and Coffee Tax Aims to Combat Obesity
Sugar-Laden Milkshakes and Coffees to Face Additional Tax by 2028 in Battle Against Obesity
In a significant move to combat childhood obesity, the Health Secretary has declared an extension of the sugar tax to encompass milk-based beverages high in sugar from 2028. Wes Streeting informed the Parliament of the decision, simultaneously announcing a reduction in the sugar threshold for the tax's applicability, from 5g down to 4.5g of sugar per 100ml.
This adjustment implicates a possible tax increment on popular items such as Yazoo, Muller's Frijj, and Starbucks Caffe Latte, including those drinks marketed as “high protein” like Ufit and Shaken Udder. Initiated by the Conservative government in 2018, the sugar levy's primary goal is to diminish sugar consumption by motivating producers to lessen their products' sugar content.
The expanded tax will also include plant-based milk alternatives, such as soy, oat, and almond beverages, treating them similarly to dairy milk products starting from 2028. The move marks the first extension of the tax which, until now, exempted milk-based drinks owing to their calcium content.
Despite the tax's imposition on pre-packaged drinks, over-the-counter beverages from cafes and coffee shops remain unaffected. Nevertheless, the policy introduces a “lactose allowance” to account for milk's naturally occurring sugars, ensuring these are not factored into the total sugar content for tax assessment purposes. Notably, fruit juices, non-alcoholic beer and wine, and meal replacement beverages are also exempt from this levy.
Criticism of the tax expansion arises from concerns over governmental overreach into personal consumption choices. However, Streeting justifies the measure as crucial for improving public health and alleviating the NHS's burdens, stating, “This government will not look away as children get unhealthier…Obesity robs children of the best possible start in life, hits the poorest hardest, sets them up for a lifetime of health problems and costs the NHS billions.”
The industry response has been mixed. Dairy UK's chief executive, Judith Bryans, expressed disappointment over the decision but acknowledged the inclusion of the lactose allowance as a positive step for acknowledging dairy's unique composition.
The proposed change initially considered a more stringent threshold of 4g of sugar per 100ml. However, following industry feedback about reformulation challenges, the threshold was set at 4.5g, demonstrating a consideration for the practical difficulties businesses may face.
The Food and Drink Federation has welcomed the government's receptive stance, appreciating the balance struck between promoting healthier diets and recognising the complexities involved in product reformulation.
The tax's expansion could potentially not result in increased retail prices for milk-based beverages if producers choose to absorb the cost or reduce their products' sugar content. The original sugar tax has led to a 46% reduction in the sugar content of fizzy drinks, showcasing the leverage taxation has on encouraging healthier dietary choices.
Manufacturers are expected to respond by either reformulating their products to lower sugar concentrations or reducing portion sizes to adapt to the forthcoming tax adjustment. Ultimately, any price adjustments are anticipated to influence consumer behaviour, aligning with the government's objectives to foster a healthier population.
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