How lattes and milkshakes in Scotland would be hit by new sugar tax under government plans

The sugar tax applied to fizzy drinks could be extended to pre-packaged lattes and milkshakes under new UK government proposals.

Milkshakes, lattes and other pre-packaged milk-based drinks could soon face new taxes under plans being considered by the UK government to expand the sugar levy, in a move ministers say is aimed at tackling childhood obesity.

Pre-packaged milkshakes could be hit by a sugar tax | Getty Images

The Treasury launched a consultation on Monday proposing to end the exemption for milk-based drinks and their plant-based alternatives, such as oat and rice beverages, from the Soft Drinks Industry Levy (SDIL), more commonly known as the sugar tax.

The levy would apply in Scotland, as well as south of the Border.

Subscribe today for the best Scottish news via our daily newsletter

UK home secretary Yvette Cooper said the measures were part of a scheme to improve children’s health. “We are making sure we are taking practical, sensible measures to improve the health of our children,” she told BBC Breakfast.

First introduced by the Conservative government in April 2018, the SDIL applies to manufacturers of sugary soft drinks and was designed to encourage reformulation and reduce sugar consumption among children.

The tax has since raised £1.9 billion and, according to government figures, helped reduce sugar levels in many popular drinks. Almost 90 per cent of soft drinks sold in the UK are now exempt from the levy due to changes made by manufacturers.

However, pre-packaged milk-based drinks have so far remained outside its scope. Government analysis shows 93 per cent of drinks in this category could be hit by the expanded tax unless sugar content is lowered in line with the new proposed thresholds.

The government is also proposing to lower the threshold for sugar content from 5g to 4g per 100ml - a move designed to close what the Treasury describes as a “target effect” that has led manufacturers to cluster sugar levels just below the existing limit.

The exemption for milkshakes and lattes was initially made due to concerns about children’s calcium intake. But the Treasury now argues such drinks contribute just 3.5 per cent of calcium in young people’s diets, while delivering high levels of sugar. A spokesperson said: “It is likely that the health benefits do not justify the harms from excess sugar.”

Chancellor Rachel Reeves first signalled the government’s intention to review the levy in her Autumn Budget last year. The consultation, which opened Monday, will run until July 21.

The proposals have drawn sharp criticism from opposition parties. Shadow chancellor Mel Stride called the move a “sucker punch” to families, accusing Labour of pushing up the cost of living. Reform UK leader Nigel Farage said he was “sick to death of a government telling us how we should live” and urged ministers to focus on education instead of taxation.

Conservative leader Kemi Badenoch also criticised the proposal, calling the levy “a bit too much nanny state”. She said the government appeared to be “just looking for what else they can tax”.

Supporters, however, say the extension is long overdue. Tam Fry, chairman of the National Obesity Forum, said the levy was “not a game-changer”, but a necessary step in a broader strategy to improve public health.

The Food and Drink Federation welcomes the consultation, but warned of rising inflationary pressures on manufacturers. The organisation urged ministers to ensure a stable policy environment to support continued investment in healthier products.