London, November 27, 2025
The UK government will extend its Soft Drinks Industry Levy (SDIL) to pre-packaged milk-based drinks starting January 2028, lowering the sugar threshold to 4.5g per 100ml to target added sugars and reduce sugar intake nationwide.
Extension of Sugar Tax to Milk-Based Drinks
From January 2028, milkshakes, flavoured milks, sweetened yoghurt drinks, chocolate milk drinks, and ready-to-drink coffees will fall under the UK’s Soft Drinks Industry Levy. The threshold for sugar content triggering the levy will decrease from 5g to 4.5g of added sugar per 100ml, thereby increasing the range of products subject to taxation unless reformulation occurs.
Levy Rates and Lactose Allowance
The levy maintains its existing rate structure charging manufacturers and importers 18 pence per litre for drinks containing 4.5–8g of added sugar per 100ml, and 24 pence per litre for drinks exceeding 8g. A lactose allowance has been introduced to exempt naturally occurring lactose sugars in dairy products, ensuring that only added sugars are taxed.
Rationale and Future Implementation
This policy change aims to curtail sugar consumption, particularly among children, to improve long-term public health outcomes and reduce the pressure on healthcare systems linked to obesity and diet-related diseases. After consultations due in 2025, the implementation date was set to allow manufacturers adequate time for reformulation and compliance.
Background and Significance
The Soft Drinks Industry Levy, commonly known as the sugar tax, was initially applied to sugary soft drinks to drive sugar reduction since its introduction. The planned expansion to milk-based beverages represents a significant broadening of the UK’s strategy to combat obesity and diet-related health issues. This move underscores government commitment to deeper intervention by targeting additional product categories where high sugar levels contribute to public health risks.
By extending the levy and lowering sugar thresholds, the government is prompting industry innovation and sugar reduction in previously untaxed dairy-based beverages, signaling a stronger regulatory stance in the pursuit of healthier consumer options.