Ribena and Lucozade maker issues price hike warning to customers

The maker of Ribena and Lucozade has warned it may scale back UK investment if an increased sugar tax goes ahead.

Soft drinks firm Suntory also said shop prices were likely to rise because of a forecast £60million hit to the business.

Chancellor Rachel Reeves is expected to confirm in next month’s Budget if a “strengthened” sugar tax - formally known as the Soft Drinks Industry Levy - will go ahead. It could involve lowering the sugar content threshold at which the levy kicks in from 5g per 100ml to 4g.

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Japanese firm Suntory, which bought cordial Ribena and energy drink Lucozade from GSK in 2013, says it has since spent £13m reducing its products’ sugar content by 57% to 4.5g per 100ml or less. But it warned it may be forced to divert similar funds into research and development to meet the proposed 4g threshold. If not, it says it faces a £60m a year additional tax bill.

Elise Seibold, chief operating officer at Suntory Beverage Great Britain and Ireland, said it was “coming at the worst time for the industry” ahead of the delayed Deposit Return Scheme from 2027 - costing it £50m. “That needs to be our number one priority because it is the right thing to do,” she said of the DRS, which wil reward consumers for recycling bottles with money or vouchers.

She claimed the proposed sugar content reduction target had “very questionable” health benefits.

And she warned it could hamper planned investment at its Coleford factory in Gloucestershire, which employs 350 people. “We don’t have the money twice,” she explained. “It hinders our ability to grow. While you are trying this you are not putting money into the factory, into innovation, into better stuff.” Asked whether its Japanese owner may consider investing abroad instead, she said: “That is a possibility”.

She added it was “very likely” a higher tax bill could ultimately mean its drinks prices go up.

Ms Seibold said it was “important to preserve the taste” of its products, warning a sudden sugar reduction would hammer demand, as seen after Lucozade changed the drink’s recipe and suffered a £25m hit to sales. “If you did it wrong, that could be the end of a brand,” she added.

Some of the country’s biggest drinks companies, including Coca-Cola and Irn-Bru, recently wrote to PM Sir Keir Starmer waring the increased levy would mean an extra £220m in costs. In a letter, organised by the British Soft Drinks Association, they said strengthening the sugar tax would have “severe economic consequences for our industry”