UK to Extend Sugar Tax to Milk-Based Drinks from 2028 with Lower 4.5g Threshold and Lactose Allowance

The government has confirmed that the sugar levy will apply to pre-packaged milk-based beverages from 2028, expanding the scope beyond carbonated drinks. The threshold for sugar content will drop to 4.5g per 100ml as part of a broader push to curb childhood obesity.

What’s changing

Health Secretary Wes Streeting announced that the levy will cover milk-based drinks with sugars above 4.5g per 100ml, taking effect in 2028. Popular milk beverages such as Yazoo, Muller's Frijj, and Starbucks Caffè Latte could face the levy, along with high-protein variants like Ufit and Shaken Udder, depending on their sugar content.

Scope and exemptions

The levy applies to drinks sold in cans, cartons, and similar packaging, but not beverages dispensed in cafes. A lactose allowance will exclude the naturally occurring sugars found in milk from counting toward the levy, so not all sweetness in dairy drinks will be taxed. Plant-based milks such as soy, oats, and almonds will also be brought into the levy from 2028, treated similarly to dairy drinks.

Under the new rule, some beverages that currently sit just under the old 5g threshold may become taxable if their sugar content exceeds 4.5g per 100ml, or if producers reformulate to cross the limit.

Fruits juices, alcohol-free beer and wine, and meal replacement drinks remain outside the tax. Dairy drinks were previously exempt due to their calcium content, but the new policy extends the scope to a broader range of sugar-related concerns.

Industry response

Judith Bryans, chief executive of Dairy UK, described the decision to broaden the levy as disappointing given the nutritional value of milk and yogurt drinks. She welcomed the lactose allowance, arguing it recognises the natural sugars in dairy and avoids penalising lactose.

Prices, reformulation, and health impact

The extension may not automatically raise shelf prices if manufacturers absorb the tax or reduce sugar levels to stay under the limit. Historically, many fizzy drinks have reformulated to cut sugar, while some high-sugar variants remain. The government notes the original levy contributed to a roughly 46% reduction in sugar in fizzy drinks, supporting healthier diets.

Industry observers expect further reformulation and, in some cases, changes to portion sizes as producers respond to the new rules.

Key Takeaways

• The sugar levy now covers pre-packaged milk-based drinks from 2028, with a 4.5g/100ml threshold.
• A lactose allowance excludes naturally occurring milk sugars from the tax base.
• Plant-based milks join the levy, aligning dairy and non-dairy beverages under the same rules.
• Reformulation and potential price changes are likely as manufacturers adapt.

Expert comment

Expert note: Public health experts say the policy supports long-term reductions in sugar consumption, while industry groups call for careful implementation to protect nutritious products.

Summary

The United Kingdom is broadening the sugar tax to include milk-based drinks from 2028, with a lower 4.5g per 100ml threshold and a lactose allowance. The change covers both dairy and plant-based beverages and is likely to drive reformulation and possible price effects. Health officials emphasise that the policy aims to improve population health and ease pressure on the NHS.

Key insight: Extending the levy to all milk-based drinks signals a broader push to cut sugar across everyday products, potentially reshaping the market and consumer habits. Source