The exemption has served its purpose. Now it's time to close it.
For nearly a decade, Britain's sugar tax has quietly reshaped what people drink and how manufacturers make beverages — and now, the government is closing one of its most visible loopholes. Beginning in January 2028, pre-packaged milkshakes and milky coffees will fall under the same levy that already governs soft drinks, a recognition that the boundary between 'nutritious' and 'sugary' has long been blurred. The expansion reflects a broader philosophical shift: that public health is not merely a matter of individual choice, but of the environments — including economic ones — that governments deliberately construct. Britain is betting, again, that price can do what persuasion alone cannot.
- Milkshakes and coffee drinks containing significant sugar have escaped Britain's levy for years, creating a loophole that manufacturers have quietly exploited by reformulating products to include milk.
- A single pre-packaged milkshake can carry 20 grams of sugar or more — often exceeding the soft drinks already taxed — making the exemption increasingly difficult to justify as obesity rates, especially among children, remain stubbornly high.
- The government's announcement signals a deliberate escalation of tax policy as a public health instrument, giving manufacturers until 2028 to reformulate, reprice, or absorb the new costs.
- Industry response will determine whether the expansion succeeds — companies may reduce sugar content to stay below the threshold, pass costs to consumers, or lobby for new carve-outs.
- Other nations have watched Britain's sugar tax experiment closely, and a successful expansion could accelerate similar regulatory moves across the global beverage market.
Britain is closing a long-standing loophole in one of its most consequential public health policies. Starting January 2028, pre-packaged milkshakes and milky coffees will be brought under the country's soft drink industry levy — the first major expansion of a tax that has quietly reshaped the beverage industry since its introduction in 2016.
The original levy was built on a straightforward premise: tax drinks containing more than 5 grams of sugar per 100 milliliters, and manufacturers will have reason to reformulate. For years, milkshakes and milk-based coffees occupied an ambiguous exemption — perhaps justified by the nutritional value of milk, or simply by a lack of political will to extend the tax further. The result was a predictable incentive: add milk, escape taxation. A single pre-packaged milkshake can contain 20 grams of sugar or more, often rivaling or exceeding the soft drinks already subject to the levy.
The evidence from nine years of the original tax has been hard to dismiss. Manufacturers did reformulate their products. Sugar consumption did shift. Obesity rates, particularly among children, remain a serious challenge, but the policy appears to have moved the needle. The expansion reflects a government now willing to treat that track record as a mandate to go further.
What comes next depends on how the industry responds. Some manufacturers will likely reduce sugar content to stay below the threshold; others may pass costs to consumers. With more than two years to prepare, companies have time to adapt — but the direction is clear. Britain has decided the old exemption no longer holds, and other governments watching this experiment may soon reach the same conclusion.
Britain is closing a loophole in one of its most consequential public health policies. Starting in January 2028, the government will begin taxing pre-packaged milkshakes and milky coffees—beverages that have until now escaped the country's sugar tax entirely. The move, announced by the health department this week, represents the first major expansion of a levy that has quietly reshaped how the beverage industry operates for nearly a decade.
The soft drink industry levy, introduced in 2016 under a Conservative government, was designed with a simple logic: make sugary drinks more expensive, and people will buy fewer of them. The tax applies to manufacturers and importers of drinks containing more than 5 grams of sugar per 100 milliliters, sold in pre-packaged form—cans, bottles, cartons. It was never meant to be permanent in its current shape. The architects of the policy understood that as manufacturers reformulated their products to avoid the tax, the boundaries of what counted as a taxable drink would need to shift.
For years, milkshakes and coffee-based beverages with milk have occupied an ambiguous space. They contain significant amounts of sugar, often as much as or more than the soft drinks already subject to the levy. A single pre-packaged milkshake can contain 20 grams of sugar or more. Yet they were exempted, perhaps because they were seen as containing nutritional value from the milk, or because the political will to expand the tax simply wasn't there. The exemption created an obvious incentive: manufacturers could reformulate their products to include milk and escape taxation.
The expansion signals something important about how governments now think about obesity prevention. The original sugar tax was controversial—critics called it regressive, arguing it would hit poorer households hardest. But the evidence from the past nine years has been difficult to dismiss. Manufacturers did reformulate. Consumption patterns did shift. Obesity rates, particularly among children, remain a serious public health challenge, but the tax appears to have contributed to modest improvements in sugar intake across the population.
What happens next will depend partly on how manufacturers respond. Some will likely reduce the sugar content of their products to stay below the taxation threshold. Others may absorb the cost or pass it to consumers. The beverage industry has shown it can adapt—many companies have already developed lower-sugar versions of their popular drinks. The question is whether the tax will be enough to push them toward reformulation, or whether consumers will simply pay more for the same products.
The timing of the announcement matters too. The government is signaling that it intends to use tax policy as a tool for shaping public health outcomes, at least in this domain. Other countries have watched Britain's experiment closely. If the expansion of the levy proves effective at reducing sugar consumption without causing significant economic disruption, other governments may follow. The beverage industry, already adapting to similar policies in other nations, will likely view this as the beginning of a longer trend rather than an isolated decision.
For now, manufacturers have more than two years to prepare. They can reformulate, they can adjust their pricing strategies, they can lobby for exemptions. But the direction of travel is clear: Britain's government has decided that the exemption for milkshakes and milky coffees no longer makes sense. Starting in 2028, they will be treated like any other sugary drink.
Citações Notáveis
The forthcoming inclusion of milkshakes and milky coffees under this levy marks a significant policy shift to curb sugar intake across varied product categories.— UK health department
A Conversa do Hearth Outra perspectiva sobre a história
Why did milkshakes and milky coffees get exempted in the first place?
The original thinking was probably that milk adds nutritional value—calcium, protein. But that logic breaks down when you're talking about a milkshake with 20 grams of added sugar. The exemption also reflected political reality in 2016. Expanding the tax too far would have faced more resistance.
So manufacturers have been gaming the system?
Not gaming exactly, but responding rationally to incentives. If you can add milk to your product and avoid the tax, why wouldn't you? The government is essentially saying that loophole has served its purpose.
Will this actually change what people drink?
That depends on how manufacturers respond. If they reformulate to reduce sugar, then yes. If they just raise prices and people keep buying the same products, the effect is more limited. The evidence from the original levy suggests manufacturers do reformulate when faced with real financial pressure.
Who loses here?
Consumers who can't afford the price increase, potentially. And manufacturers who've built their business model around these exempted products. But the government's argument is that the public health benefit outweighs those costs.
Is this the end of the expansion, or will more products get added?
Hard to say. But the fact that they're announcing this now, with two years' notice, suggests they're thinking about this as an ongoing process. Other beverage categories could be next.