EU clears way for Ireland’s sugar tax to come into effect next week
Ireland’s tax on sugar-sweetened beverages will come into effect on 1 May after the European Commission (EC) concluded that the levy does not involve state aid.
The country had planned to introduce the tax on 6 April – the same day as the UK’s levy started – but it was required to receive state aid approval from the European Union. State aid is the practice of businesses receiving an unfair advantage as a result of state funding.
A levy of €0.16 a litre will be put in place for drinks with between 5g and 8g of sugar per 100ml. It will rise to €0.24 a litre for varieties with more than 8g of sugar.
The EC said it found that soft drinks can be treated differently to other sugary products in view of health objectives.
In a statement, it said: “The Commission took into account the fact that soft drinks are the main source of calories devoid of any nutritional value and thereby raise particular health issues. Furthermore, soft drinks are particularly liable to lead to overconsumption and represent a higher risk of obesity, also compared to other sugary drinks and solid food.”
On this basis, the Commission concluded that the scope of the Irish sugar sweetened drinks tax and its overall design are consistent with the health objectives pursued and does not unduly distort competition.
The tax forms part of measures that Ireland is taking to tackle obesity and the government expects that it will generate €30 million in 2018 and €40 million in a full year.
Ireland finance minister Paschal Donohoe said: “The sugar-sweetened drinks tax is an important signal to industry to reformulate their products to reduce the sugar content offered to consumers. From the consumer perspective, the imposition of a financial barrier on sugar-sweetened drinks will result in reduced consumption by incentivising individuals to opt for healthier drinks.”
Ireland health minister Simon Harris added: “This is significant and positive news and represents major progress under healthy Ireland towards tackling obesity. With one in four children on the island of Ireland either overweight or obese, this tax is one of a range of measures that can help change parents’ and children’s behaviour.”
