Suntory, the Japanese firm behind Ribena and Lucozade, has warned that it may raise prices and scale back UK investment if Chancellor Rachel Reeves proceeds with a strengthened sugar tax in the upcoming Budget. The company estimates the proposed changes could cost it £60 million annually.
The Soft Drinks Industry Levy, currently applied to drinks with 5g of sugar per 100ml or more, could see its threshold lowered to 4g per 100ml. Suntory says it has already reduced sugar content by 57% over the past decade, spending £13 million to reach an average of 4.5g per 100ml. Meeting the new threshold would require further investment in research and development, diverting funds from factory upgrades and innovation.
Elise Seibold, chief operating officer of Suntory Beverage Great Britain and Ireland, warned that the timing is particularly challenging as the industry also prepares for the Deposit Return Scheme (DRS) in 2027, which will cost the company £50 million. “We don’t have the money twice,” she said, adding that the health benefits of the proposed sugar reduction are “very questionable.”
Seibold noted that a sudden sugar reduction could harm demand, citing a previous recipe change for Lucozade that led to a £25 million sales hit. “If you did it wrong, that could be the end of a brand,” she said. The company also warned that higher costs would likely be passed on to consumers through increased prices.
Suntory’s Coleford factory in Gloucestershire, which employs 350 people, could see investment hampered. Seibold did not rule out the possibility of the Japanese parent company investing abroad instead. The warning follows a joint letter from major drinks firms including Coca-Cola and Irn-Bru, which said the tax increase would add £220 million in costs to the industry.
