Sugar Tax Expansion: Milk-Based Drinks and Lattes to Face Higher Costs

Shiva K Dhakal
National Press Corporation(NPC)
United Kingdom-Packaged milkshakes, flavoured milk drinks and ready-to-drink lattes will be included in the UK’s sugar tax for the first time, Health Secretary Wes Streeting has announced.

The measure, which takes effect on 1 January 2028, marks the most significant extension of the soft drinks levy since its introduction in 2018. Under the changes, the threshold at which the tax applies will be lowered from 5g to 4.5g of sugar per 100ml, placing additional pressure on manufacturers to reformulate products or face higher costs.

Milk-based beverages were previously exempt from the levy, despite concerns from public health experts about rising sugar intake among children and young adults. The expanded policy will apply only to packaged drinks sold in shops, while “open-cup” beverages served in cafés, restaurants and bars will remain outside the scope of the tax.

Streeting’s announcement comes a day before Chancellor Rachel Reeves delivers her first Budget, which is expected to unveil a new tax on electric vehicles, reforms to ISA rules and adjustments to the two-child benefit cap. The Treasury said the sugar levy extension forms part of a wider strategy to tackle obesity and reduce long-term pressures on the NHS.