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Department of Health Proposes Sugary Drink Tax Increase in Budget 2025

BusinessDepartment of Health Proposes Sugary Drink Tax Increase in Budget 2025

The Department of Health has called for a 27% increase in the tax on sugary drinks, citing a sharp rise in the sale of energy drinks and inflationary pressures. The proposed hike aims to curb public health concerns over both excessive sugar and caffeine consumption, with energy drinks becoming a growing concern despite reductions in sugar levels by some manufacturers.

A submission to Finance Minister Jack Chambers ahead of the 2025 Budget highlighted a growing consumption of sugar-laden beverages. It noted that while sugar content in drinks had been reduced, demand for energy drinks, which are often high in sugar and caffeine, had been on the rise. According to the submission, sugary drink consumption surged from 30 million liters in 2020 to 40 million liters in 2023, a significant increase that raised health concerns.

The document also highlighted that the current sugar tax, which generates approximately €30 million annually for the Exchequer, had contributed to a reduction in sugar intake among consumers. However, officials pointed out that four out of the five leading soft drink brands had reformulated their products to avoid the tax. Despite this, there are growing concerns that bars, hotels, and shops are charging the same price for both sugary and diet drinks, undermining the tax’s intended effect of incentivizing healthier choices.

In response to the department’s proposal, Minister Chambers opted not to implement the recommended tax increase. Instead, he introduced a €1 increase in the price of cigarettes in Budget 2025, a move aimed at addressing the “old reliables” in public health policy.

Civil servants also proposed increases in betting tax, which could have raised between €12 million and €25 million annually. However, the suggestion was met with resistance from small bookmakers, who warned that higher taxes could lead to more shop closures. The submission noted the shift towards online betting, which made it difficult to determine how much of the closure trend was due to changes in tax policy versus broader industry trends.

Another area of concern in Budget 2025 was the price of alcohol. While the drinks and pub industry had lobbied for a reduction in alcohol taxes, citing rising costs and wage increases, public health advocates argued that no increase in alcohol duty would undermine public health objectives. The submission pointed out that excise duty on alcohol had not increased in over a decade, meaning its value had effectively diminished due to inflation.

In conclusion, while the Department of Health advocated for changes to the sugar and betting taxes, Minister Chambers’ Budget 2025 focused on other priorities, leaving these key proposals unaddressed.

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