Nutrition Drinks Hit By VAT

As calls come for the price of fizzy drinks to rise because of their associated health implications, the food and drink sector is pointing out that, as they predicted, sales of sports nutrition drinks have slowed dramatically since the introduction of VAT in October.

The Government applied the standard 20 per cent of VAT, which made a considerable difference to the price of drinks, as a standard 1kg tub of protein can cost up to £50.

Recent Nielsen data shows that sales have declined from 35 per cent of the grocery category to just 7 per cent, as both brands and retailers are having to invest in promotions to help sales.

This drop will be a massive blow to the sector, as according to the British Soft Drinks Association, sales of sports and energy drinks topped £1,500 million last year in the UK alone.

In addition to hitting retailers, small businesses like independent gyms, which rely on sales of sports drinks as a large factor of income may well find that their profits endure a decline.

One worrying factor is that the latest health survey for England data shows that in England in 2010 a 62.8 per cent of adults aged 16 or over were overweight or obese and furthermore 26.1 per cent of all adults were obese. While the Department Of Health states that direct costs to the NHS caused by obesity are now estimated to be at least £5.1 billion per year.

The move comes just six months after extensive lobbying forced the Government into a controversial U-turn over the infamous “pasty tax”, when bakers escaped the imposition of 20 per cent VAT on hot food that was allowed to cool.

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