Sweet taste of success for soft drinks sector

Who says there were no winners in Budget 2017? Try telling that to the soft drinks industry which has been popping corks since Tuesday after Minister for Finance Michael Noonan decided that it would be inopportune to bring in a sugar tax anytime soon.

Noonan had scarcely announced his intention to introduce the tax than he was explaining why the “highly integrated production and supply chains” in the drinks industry between Ireland and Britain mean it would be “prudent” to align any Irish tax with a similar measure in the UK.

Not that the Minister saw fit to earmark funds raised through any such levy for sports or nutrition in schools as the UK measure envisages.

As it stands the UK intends to introduce its sugar tax of up to 24p sterling per litre in April 2018, but this is on the basis of a budget commitment from former chancellor of the exchequer George Osborne. With a new leadership in Downing Street, there is no certainty the tax will proceed in 2018 or anytime.

But even the 18-month stay on the Irish proposal is good news for the Irish soft drinks industry. Having fought the idea of a tax for years, the industry has more recently focused on trying to buy some time and it appears to have persuaded Noonan of the wisdom of moving in step with Britain.

According to the Irish industry’s own figures, pushing the advent of the sugar tax out to April 2018 will, in itself, save the sector €75 million. Any delay beyond that is, on the basis of the same figures, worth around €50 million a year.

Little wonder then that Kevin McPartlan, the man brought in by the Irish Beverage Council to lead its lobbying efforts, is tipped for promotion to a more expansive role in Ibec's food and drink division.