Popular packaged drinks like milkshakes and lattes are set to become more expensive following the latest government budget, as the Chancellor expands the existing sugar tax in a bid to tackle the nation's obesity crisis.
What's Changing with the Sugar Levy?
Health Secretary Wes Streeting confirmed that the exemption for milk-based drinks is being removed. The sugar tax will now apply to pre-packaged milkshakes and flavoured milk. Furthermore, the threshold for the levy is being tightened. The sugar limit will be lowered from 5g per 100ml to 4.5g per 100ml, meaning more drinks will be caught by the charge.
This move, announced as part of the budget on Wednesday 26 November 2025, is a direct response to what ministers describe as a major public health challenge. The government has stated it will not ignore rising childhood unhealthiness.
A Direct Assault on Obesity
The expanded levy is squarely aimed at combating obesity, which is cited as a problem that costs the NHS billions of pounds each year and severely impacts children's life chances. By making sugary drinks more expensive, the government hopes to discourage consumption and encourage healthier choices.
It is important to note that this change only affects pre-packaged drinks sold in shops and supermarkets. Beverages made fresh in cafes, coffee shops, or restaurants will not be subject to the new tax rules.
What This Means for Shoppers
For consumers, the immediate effect will be seen at the checkout. The cost of popular pre-packaged items like bottled milkshakes and certain flavoured lattes is expected to rise as manufacturers pass on the cost of the new sugar tax. This measure represents the Labour government's continued effort to deliver on its promise of change, using fiscal policy to address a critical health issue.
