Drinks giants like Coca-Cola could sue the government over the sugar tax

Companies that make sugary soft drinks are considering a legal challenge to the UK’s new “sugar tax”, introduced in last week’s budget.

The Sunday Times and the Guardian both report that leading figures in the industry — including Coca-Cola, Irn Bru maker AG Barr, and Britvic, which makes Tango, 7Up, and Pepsi Max in the UK — are considering a legal challenge to the new law, which comes into effect in 2018.

The levy will add 24p to every litre of the highest sugar drink sold and Chancellor George Osborne is hoping the new tax will raise £520 million in its first year.

But drinks companies, understandably, are upset with the surprise new tax, which they fear will hit sales. As a result, many are considering a legal challenge, likely in Europe, to block the tax.

The Guardian quotes Gavin Partington, director general of the British Soft Drinks Association, as saying: “At this stage all options are on the table. We need clarification about how this tax is going to work, exactly what’s excluded and what’s not. Nothing can be ruled out at this stage.”

The paper also quotes a Coca-Cola Great Britain spokesperson as saying: “We need to know more about the levy and how the government plans to implement it. Once this is clear to us, we’ll decide on what steps to take as a business and how best to continue the work we have done to help people consume less sugar and calories from our drinks.”

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