April 3, 2018 / 4:39 PM / 6 months ago

CORRECTED-UPDATE 1-Most UK retailers' own-brand soft drink prices will not rise after sugar tax

(Corrects in paragraph 4 to say per 100 millilitres (not millimetres)

* Tesco, others reformulated entire fizzy drink line

* Sainsbury’s says wants to give choice to shoppers

* UK sugar tax to come into effect on April 6

By Martinne Geller and Costas Pitas

LONDON, April 3 (Reuters) - Britain’s biggest supermarket chain Tesco said its own brand fizzy drinks will not go up in price when a sugar tax comes into effect this week as they are already below a government-imposed threshold.

Fizzy drinks made by rival supermarket chains Asda and Morrisons will also be unaffected, as will many branded drinks, as their sugar content has been reduced sufficiently to be exempt from the levy. Soft drink makers have had two years to prepare for the tax, although there will be price increases for some own-label drinks made by Sainsbury’s as well as Coca-Cola Classic.

Britain will implement the tax on makers of sugary drinks from Friday, a move advocated by health campaigners who argue the beverages are a source of empty calories.

A charge of 18 pence ($0.25) per litre will be levied on drinks containing 5 grammes or more of sugar per 100 millilitres and 24 pence per litre on drinks containing 8 grammes or more.

The tax was announced in 2016, giving companies time to change their recipes.

Tesco said it had spent years cutting the level of sugar in its own label products and will not be subject to the levy. All of its own-brand soft drinks fell below the levy’s threshold in 2016.

Asda and Morrisons have also worked recently to reformulate their entire lines of carbonated soft drinks, according to company officials.

Of Britain’s big four supermarket chains, only Sainsbury’s has not reformulated its entire range.

“Health matters to our customers and reformulation has been a fundamental part of our approach to healthy eating for many years,” a spokeswoman for Sainsbury’s said, noting the company has removed more than 2,667 tonnes of sugar from its own brand soft drinks. She added however: “We think it’s important that customers have choice, which is why we continue to offer a full range of soft drinks, including no added and reduced sugar options.”

Tesco, which has a 28 percent market share in Britain and also operates abroad, said 85 percent of the drinks sold in its stores will be exempt from the charge although some brand prices will rise.

Coca-Cola, for example, has reformulated the bulk of its portfolio, except for its flagship Coca-Cola Classic, its top-selling brand, which should see its price go up if retailers pass the levy on to consumers.

UK drinks bottler Britvic said 72 percent of its total portfolio is already below the threshold. Excluding the PepsiCo brands it sells, 94 percent is exempt, a spokeswoman said.

But cuts in sugar, including to soft drinks Irn Bru, known as Scotland’s second national drink, have prompted outrage among some fans.

Confectioner Nestle also said last month it was launching a lower-sugar Milkybar in a bid to partly address one of Big Food’s toughest challenges - how to make junk food healthy but keep it tasty.

The “war on sugar” being waged by governments and consumers to combat public health emergencies like diabetes is slowing growth in global demand, challenging countries such as Brazil and India that are reliant on the sector. (Reporting by Costas Pitas and Martinne Geller; Additional reporting by James Davey Editing by Stephen Addison and Susan Fenton)

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