Soft-Drink Makers Plunge on Surprise U.K. Budget Sugar Levy

Companies that profit from Britain’s sweet tooth plunged as the U.K. unveiled a sugar tax, a surprise move that adds another burden to food and beverage companies grappling with marketing restrictions and a shift toward healthier fare.

Soft-drink makers Britvic Plc and A.G. Barr Plc both declined more than 5 percent in London, while ingredient suppliers Tate & Lyle Plc and Associated British Foods Plc fell as much as 4.9 percent and 1.5 percent, respectively. U.K. Chancellor George Osborne said the levy on the soft-drinks industry will be introduced in two years’ time, in two bands depending on how much sugar is in a drink. The tax will raise 520 million pounds ($732 million) in its first year, according to government estimates, part of which will go to schools to promote healthier lifestyles.

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Ivo Vlaev
Professor of Behavioural Science