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Barritt warns drinks prices will increase

Sugar tax: new levy set to take effect from next month

A proposed sugar tax could cause “painful price hikes”, a soft drinks producer warned yesterday.

Bruce Barritt, general manager of John Barritt & Son, said higher costs faced by distributors would be passed along to customers and hit island producers of food products.

He added: “Local bakeries and ice cream manufacturers will have to pay increased costs for sugar — currently at zero per cent duty and due to go to 75 per cent — while imported cookies, cakes, pies and ice cream have no hikes to their duty.

“We view the sugar tax as a government revenue-raising Bill not a health initiative, especially as the Government has committed to earmark ‘a portion’ of the revenues raised from the tax to support health programmes rather than ring-fence those revenues and ensure they all go to fight obesity, which was ostensibly the original reason for the tax.”

Mr Barritt said the increase of duty on sodas from 35 per cent to 75 per cent will increase the cost of cases of sodas by a few dollars.

He said: “After stores add their mark-up, I expect that a can or bottle of soda will go up by fifty cents or so.

“We have no control over retail prices as they are determined by the individual stores and each has their own business costs to address.

“The really painful price hikes will come in the juice drinks, sports drinks and iced tea categories as the current duty for them is 15 per cent and they too will be hit with a 75 per cent duty rate.”

He said the company expected to increase the cost of a case of those soft drinks by $5 to $7.

Mr Barritt added: “The likely result is that the retail price for a cold bottle of iced tea will cost more than a cold bottle of beer at a grocery or convenience store.”

He said he understood the increased tariffs, if approved, would come into effect at the start of next month.

Mr Barritt said: “I am hopeful that there will be some effort made to separate diet sodas out of the tax as these beverages contain no sugar or sweetener that adds calories and should therefore be exempt from any added duty.”

The Customs Tariff Amendment (No 2) Act 2018, tabled in the House of Assembly last month, proposes a range of tariff changes intended to improve health.

The legislation would slap higher duty rates on sugar, sweetened drinks and non-chocolate candy.