Does the sugar tax actually work? What five years of UK data show

Does the sugar tax actually work? What five years of UK data show

Since April 2018, fizzy drinks makers in the UK have paid a levy on the sugar in their products, and the question people keep asking is simple: does the sugar tax uk actually work, or did it just become another line on the shopping receipt? Five-plus years on, and with fresh government data now covering 2015 to 2024, we finally have a real answer.

The short version: the Soft Drinks Industry Levy (SDIL, its official name, though everyone calls it the sugar tax) has done what it was designed to do at the manufacturer level. Sugar sold in levy-covered drinks has fallen by nearly 40%, and independent research shows people really are consuming less sugar as a result, not just buying less. But the tax also has a genuine design flaw, and a bigger version of it arrives in January 2028.

This article isn’t about how much sugar the nation eats overall (we’ve covered that separately); it’s specifically about this one policy: how it works, what it changed, and where the evidence says it fell short.

What is the sugar tax and how does it actually work?

The Soft Drinks Industry Levy is a charge paid by drinks manufacturers and importers, not shoppers directly, though the cost is often passed through in price or reformulation. It applies to pre-packaged, sugar-sweetened drinks and works in two sugar-content bands: a standard rate for drinks with 5g to 8g of sugar per 100ml, and a higher rate for drinks with 8g or more per 100ml. Drinks below 5g per 100ml pay nothing at all. As of the current 2025–26 tax year, those rates are 19.4p per litre and 25.9p per litre respectively (up from 18p and 24p when the levy launched in 2018).

Crucially, the levy was never really designed as a tax on shoppers. Its main lever is reformulation: because the charge kicks in at fixed sugar thresholds, manufacturers have a strong financial incentive to reduce a drink’s sugar content just enough to drop into a lower band, or escape the levy altogether, rather than pay the charge and pass it on. That’s why, unlike a flat sales tax, its success is best measured not in prices at the till but in what’s actually inside the bottle, which is exactly what the data below tracks.

What happened to reformulation: the manufacturer response

This is where the levy has its clearest win. Official data from the Office for Health Improvement and Disparities (OHID), covering 2015 to 2024, shows the total amount of sugar sold in levy-covered drinks fell by 39.8%. Looked at per drink, the sales-weighted average sugar content fell by 47.4% per 100ml, and average calories per portion fell by 42.2%. Meanwhile, the volume of these drinks sold actually rose by 13.5% over the same period.

Put those together and the pattern is clear: people are drinking a similar amount of soft drinks as before, but what’s in the bottle has changed dramatically. Brands like Lucozade, Ribena, Fanta and own-label colas were reformulated below the tax thresholds well before the levy even took effect in 2018, as manufacturers raced to avoid the charge. This is precisely the mechanism the levy was built around, and by that measure, it has substantially outperformed most public health interventions of its kind. The obvious follow-up question, though, is whether all that reformulation actually changed what people ate and drank, or whether it was cancelled out by buying more of the (now less sugary) product, or getting sugar from somewhere else entirely.

What happened to actual intake: the NDNS evidence

Reformulation only matters for public health if people end up eating less sugar overall, and this is where independent researchers, rather than industry-adjacent data, provide the more convincing evidence. A controlled interrupted time-series study published in the Journal of Epidemiology & Community Health analysed the National Diet and Nutrition Survey (NDNS) from 2011 to 2019, comparing actual consumption after the levy against a modelled “what if the levy never happened” trend.

The findings: within a year of the SDIL coming into force in April 2018, children’s total daily free sugar intake (from all food and drink) fell by around 4.8g (roughly a teaspoon, and about a 10% relative reduction). Adults’ fell by around 10.9g/day (over two teaspoons, a 20% relative reduction). Looking at soft drinks alone, the reduction was even sharper in relative terms: about 23.5% less free sugar from soft drinks in children and around 40.5% less in adults. Notably, the study’s authors found overall energy (calorie) intake as a proportion from sugar didn’t shift as dramatically, suggesting some of this was offset elsewhere in the diet, a caveat worth taking seriously rather than glossing over. Still, this is a genuinely rare case of a public health policy with a randomised-adjacent evidence base showing it changed real behaviour, not just retailer shelves.

What’s changing in 2028, and the levy’s real limits

The government isn’t stopping here. Following an Autumn Budget 2025 announcement and a technical consultation that closed in September 2026, the sugar threshold for the levy will drop from 5g to 4.5g per 100ml from 1 January 2028, pulling more borderline drinks into scope. At the same time, pre-packaged milk-based drinks with added sugar (flavoured milks, milkshakes, sweetened yoghurt drinks and ready-to-drink coffees) will be taxed for the first time, having been exempt since 2018. Plain milk, unsweetened plant-based drinks and café-prepared milkshakes stay outside the levy, and a “lactose allowance” means naturally occurring milk sugars aren’t counted against manufacturers.

But the policy isn’t without real, evidence-backed criticism. The Institute for Fiscal Studies has pointed out a structural design flaw that the 2028 changes don’t fix: because each band pays a flat rate per litre regardless of exactly how sugary the drink is within that band, the effective tax per gram of sugar actually falls as a drink gets sugarier. A drink just over the top threshold pays the same rate as one far above it. The IFS also modelled the incoming milk-drinks extension and found it will bring around 12% more drink volume into scope but have only a small further effect on national sugar intake. Beyond design mechanics, economists have also long argued the levy is mildly regressive, since lower-income households spend a larger share of their budget on the drinks affected, though because most manufacturers reformulated rather than raised prices, the levy raised only about half the revenue originally forecast, which somewhat blunts that criticism in practice.

The verdict: did the sugar tax work?

On its own narrow terms, yes: convincingly. The Soft Drinks Industry Levy did what a well-designed reformulation incentive is supposed to do: it pushed manufacturers to cut sugar sharply (down almost 40% sold, per OHID), and independent NDNS research confirms people are genuinely consuming less sugar as a result, not just buying a diluted version of the same habit. That combination of industry response and measured behaviour change is unusually strong evidence for a single fiscal policy.

Where it falls short is in its design, not its concept: the IFS’s point about lightly taxing the sugariest drinks within each band is a real flaw, the levy is mildly regressive, and reduced sugar intake hasn’t yet been definitively linked to lower obesity rates at a population level: that’s a longer, harder chain of evidence to prove. The 2028 changes tighten the threshold and close the milk-drinks loophole, but don’t address the banding issue itself.

This article is general information about UK tax policy and public health evidence, not medical or dietary advice; if you’re managing a health condition affected by sugar intake, speak to your GP or a registered dietitian about what’s right for you.

FAQs

Does the UK sugar tax actually reduce how much sugar people eat?

Yes. Independent NDNS research found free sugar intake fell by about 4.8g/day in children and 10.9g/day in adults within a year of the levy taking effect in 2018; not just less sugar sold, but less consumed.

What is the Soft Drinks Industry Levy (sugar tax)?

It’s a charge on manufacturers and importers of pre-packaged, sugar-sweetened drinks, introduced in April 2018. It applies in two bands based on sugar content per 100ml, with drinks under 5g/100ml exempt entirely.

How much sugar has been cut from soft drinks since the levy?

OHID data covering 2015–2024 shows a 39.8% fall in total sugar sold from levy-covered drinks, and a 47.4% cut in the average sugar content per 100ml across those drinks.

Do shoppers pay the sugar tax directly?

Not as a separate charge at the till in most cases. It’s levied on manufacturers, most of whom reduced sugar content to avoid or reduce the charge, rather than raising prices, which is why the tax raised roughly half the revenue originally forecast.

Is the sugar tax regressive?

To some extent, yes: economists note lower-income households spend proportionally more on affected drinks. In practice this effect has been softened because manufacturers mostly reformulated rather than passed costs to shoppers.

What’s changing with the sugar tax in 2028?

From 1 January 2028, the sugar threshold drops from 5g to 4.5g per 100ml, and pre-packaged milk-based drinks with added sugar (flavoured milk, milkshakes, sweetened yoghurt drinks) will be taxed for the first time.

Will milkshakes and flavoured milk be taxed under the new rules?

Pre-packaged, sweetened milk-based drinks will be, from January 2028. Plain milk, unsweetened plant-based drinks, and café-made milkshakes remain exempt.

What’s the biggest criticism of the sugar tax’s design?

The Institute for Fiscal Studies says the levy taxes sugar more lightly the more of it a drink contains, because each band charges a flat rate regardless of exact sugar content within it; the 2028 changes don’t fix this.

Has the sugar tax reduced obesity in the UK?

Not conclusively proven yet. It’s been shown to cut sugar sold and consumed, but a direct, population-level link to lower obesity rates is a longer chain of evidence that hasn’t been definitively established.

Which drinks are exempt from the UK sugar tax?

Pure fruit juice, milk-based drinks (until January 2028), drinks under 5g sugar per 100ml, and small producers below a turnover threshold are currently outside the levy.