'Sugar tax could lead to increase in illegal trade', suppliers claim

A coalition of businesses is calling on the Government to scrap the sugar tax. Credit: Anthony Devlin / PA Wire

A sugar tax on soft drinks could increase illegal trade into the UK, a group of suppliers has claimed.

A coalition of businesses under the banner 'Face The Facts, Can The Tax' is calling on the government to scrap the idea.

The proposed levy on drinks will come into force from 2018 and is central to the government's childhood obesity strategy.

But some firms believe the new policy could encourage "criminal gangs to exploit the tax and flood the market with imported product," according to James Bielby of the Federation of Wholesale Distributors.

Taxing sugary drinks is central to the government's childhood obesity strategy. Credit: PA

But Malcolm Clark, co-ordinator of the Children's Food Campaign, said the suggestion was "a ridiculous and unsubstantiated scare story from the sugary drinks industry".

He added: "They have lost the public health, political and moral arguments. They are now having to fall back on the discredited and failed tactics of tobacco companies."

"Coca-Cola and others have already spent mega-bucks specifically trying to block the soft drinks industry levy - a core component of the Government's Childhood Obesity Plan.

"Politicians and the public will realise that we are seeing a last-ditch attempt by the food and drink industry to protect their short-term profits at the expense of children's health and the NHS budget."

A Treasury spokesman said: "The vast majority of sugary soft drinks consumed in the UK are made in the UK.

"The levy will apply to imports the same as UK-made drinks and just as with any tax, HMRC will have a range of powers to enforce it including seizure of goods, fines and criminal penalties."