The UK Sugar Tax Will Now Include Plant-Based Milk Alternatives, But Not Dairy

The UK government has announced that its upcoming sugar tax will now include plant-based milk and dairy alternatives.

The decision has been met with criticism from the industry and advocacy groups, who say that the tax favors traditional dairy and penalizes alternatives.

The Soft Drink Industry Levy (SDIL), commonly referred to as a sugar tax, has officially been strengthened after a three-month-long period of consultation over the summer. Overall, the tax ostensibly aims to tackle the UK’s “obesity crisis” and will come into force on January 1, 2028.

The government has now removed the exemption of milk substitutes with added sugar from the tax, and they will now be allowed up to 4.5g of sugar per 100ml of drink. However, the government has also simultaneously allowed dairy milk a lactose allowance for the animal product’s naturally-occurring sugars.

Within the announcement, the government noted that “some respondents” had highlighted how the updated proposal could result in a plant-based drink with the same total amount of sugar as a dairy-based drink being taxed unfairly.

The government also said that plant-based drinks exclusively containing natural sugars released from their “core” ingredients would remain unaffected by the tax.

The Plant-Based Foods Alliance, a nonprofit coalition formed of NGOs and businesses that supports a broader transition towards plant-based diets, described the decision to include sweetened dairy alternatives in the tax as giving animal products an “unfair advantage.”

It also risks pushing plant-based milk products above price parity during a cost-of-living crisis, discriminates against consumers who cannot consume dairy, and fails to represent the environmental and nutritional benefits of fortified plant-based drinks.

Tax is a ‘missed opportunity’ to deliver fairness and clarity

Photo shows bowls of almonds and other plant-based ingredients along with three glass bottles of dairy-free milk — Adobe Stock Plant-based milk and other drinks can be a good source of protein, fiber, and other nutrients

In a statement, the Plant-Based Foods Alliance wrote, “We strongly support measures that promote public health and welcome the continued exemption given to unsweetened plant-based milk substitute drinks. However, we are incredibly disappointed with the introduction of a lactose allowance for sweetened milk drinks, with no equivalent to account for the naturally occurring sugars found in sweetened plant-based milk substitute drinks.”

The Plant-Based Food Alliance also noted that alternative milks are often a good source of fiber and other nutrients not included in dairy. Furthermore, the alliance highlighted how plant-based options are less resource-intensive and produce fewer emissions. Finally, it called on the government to “deliver equivalence” for the sector.

“The allowance undermines the intent of the SDIL initiative and risks confusion about the true sugar content of sweetened milk drinks,” the statement continued. “Favouring sweetened milk-based products over sweetened plant-based products is a missed opportunity to deliver fairness and clarity and creates an uneven playing field. A consistent policy across all sweetened beverages would better support health goals and ensure fairness across the market.”