Business Irish

Thursday 23 November 2017

Britvic boss urges delay for sugar tax launch

Britivic Ireland boss Kevin Donnelly. Picture Credit: Brian Gavin
Britivic Ireland boss Kevin Donnelly. Picture Credit: Brian Gavin
John Mulligan

John Mulligan

The government's planned introduction next April of a sugar tax should be delayed until summer 2018, the managing director of Britvic Ireland has argued.

Kevin Donnelly said that the timetable for bringing in the new tax will be too tight, as the Government doesn't intend to reveal details of how the tax will be levied until October.

Speaking to the Irish Independent, Mr Donnelly said that in the UK the market will have had a year to plan for the introduction of a sugar tax.

He said that the lead time needed to implement the tax here - to change IT systems and business processes - needs to be about nine months. "We may not know the final details of this until October," he said. "We don't believe that tax is the way forward, but if the Government insists on doing it, there has to be a level playing field and sufficient lead time."

"We need nine months to a year. We're not trying to avoid our obligations for the tax, but it could be relatively complicated," he added. "We don't want this to be a rush job at the end."

Mr Donnelly said that Britvic, which owns brands such as Club, Miwadi and Ballygowan and also distributes brands such as Pepsi and a range of alcoholic beverages, has already engaged with the Government and the Revenue Commissioners regarding the tax, and that the interaction has been "very good".

The introduction of the sugar tax - announced in the last Budget by Finance Minister Michael Noonan - is set to coincide with the advent of a sugar tax in the UK.

Mr Noonan said last October that given the highly integrated production and supply chains which exist in the soft drinks industry between Ireland and the United Kingdom, "it would be prudent" to align the Irish and UK sugar taxes.

Mr Donnelly insisted that there was no reason to bring in a sugar tax on drinks here just because one of being brought in the UK.

"There are more sensible ways, we believe, of reducing calories in the market," he said. Britvic has already eliminated or significantly cut sugar content on a number of its products.

Releasing half-year results yesterday, Britvic said that its sales in Ireland rose 13.3pc to £80.3m (€93m) on actual exchange rates, in the 28-week period to April 16. The group's own branded goods accounted for £27.2m (€31.5m) of the figure.

Britvic, which is also Ireland's largest bottler, has a significant licensed distribution business here.

Mr Donnelly said that the improving economy has contributed to a rise in demand for spirits, including products such as premium gins and mixers.

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