London, November 28, 2025
The UK government has lowered the sugar tax threshold to 4g per 100ml and extended the Soft Drinks Industry Levy (SDIL) to include milk-based drinks with added sugar, effective immediately, aiming to reduce sugar consumption and combat obesity, particularly among children and low-income populations.
New Tax Thresholds and Scope
The government’s updated policy now targets soft drinks with sugar contents exceeding 4 grams per 100 milliliters, a reduction from previous thresholds. For milk-based drinks, the levy applies only when the total sugar content surpasses this threshold plus an additional allowance for naturally occurring lactose. This adjustment accounts for sugars inherent in milk, ensuring that only added sugars are taxed.
Milk substitutes, including plant-based alternatives without added sugar, remain exempt from the tax. The focus is strictly on milk-based beverages that contain added sugars, reinforcing the policy’s targeted approach to encourage healthier formulations rather than broadly penalizing dairy products.
Public Health Rationale
Authorities have introduced these measures as part of a broader commitment to improve public health outcomes by decreasing sugar consumption—a known contributor to obesity and related metabolic diseases. Evidence from the original sugar tax indicates that the levy contributed to a measurable decline in sugar content in soft drinks and reduced rates of childhood obesity.
This expansion links directly to those findings, aiming to further curb sugar intake, with particular attention to children who disproportionately consume sugary flavored milk drinks. The policy is also designed to address social disparities, as low-income households often face higher risks from diets rich in added sugars.
Expert Insights on Dairy and Nutrition
Dr. Natalie Pearson of Loughborough University welcomes the extension but emphasizes caution against vilifying milk and dairy products. She underscores that unprocessed and minimally processed milk remains a crucial source of nutrients, especially for children’s growth and development. The priority, she notes, should be on reducing unnecessary added sugars and industrial additives rather than stigmatizing dairy in its whole food form.
This perspective aligns with nutritional guidelines that differentiate between naturally occurring sugars in dairy and added sugars that contribute to excessive calorie intake and metabolic health issues.
Strategic Implications for Industry and Policy
The revised levy incentivizes manufacturers to reformulate milk-based beverages to lower added sugar levels and avoid the tax. This could drive innovation toward healthier product options within the category, contributing to the overall reduction of sugar consumption at a population level.
The levy extension is one component of a larger government strategy aimed at transforming the food system to promote health equity. Complementary measures include investment in community food programs, implementation of stricter labeling standards, tighter regulations on marketing of ultra-processed foods, and broad public education campaigns.
Looking Ahead
This policy shift will require beverage producers to adapt swiftly in response to financial and regulatory pressures. It is expected to stimulate product reformulation and encourage consumers to make healthier choices without undermining the nutritional benefits of essential milk products.
By integrating fiscal measures with educational and regulatory initiatives, the UK government seeks to advance a sustainable, equitable improvement in dietary behaviors and public health outcomes over the long term.