Drinks companies to challenge 'sugar tax' in courts

Brexit concerns already being used to prevent the new levy...

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Image: Anthony Devlin / PA Wire/Press Association Images

The Irish drinks industry is gearing up to fight a proposed new 'sugar tax', according to the Irish Independent.

The Irish Beverage Council (IBC) has argued that the Revenue Commissioners' capacity to collect new tax will be "stretched" due to the UK's decision to leave the EU and the fact Northern Ireland would have no such tax on sugar.

In a pre-budget submission seen by the paper, the body – which represents the likes of Coca-Cola and Pepsi – said the new levy would only serve to increase illegal trade.

The document reads:

"We believe that the impact of the UK's decision to leave the European Union (Brexit) must be assessed before rushing into imposing an additional tax which could cause issues for UK-Ireland Trade.

"The ability of Revenue systems to manage the projected increase in customs declarations would be further stretched by the inclusion of a requirement to report on sugar in soft drinks.

"There are significant difficulties posed in controlling illegitimate trade imports from the UK unless any proposed Irish tax is aligned with the UK."

The IBC has called on the Government to "consider the consumer health risks in the case of the development of unregulated counterfeit products".

A senior Government source told the Irish Independent that any threat of legal action from the drinks industry was only motivated by profit concerns.

The source said that that the tax was "very much on the table" ahead of the 2017 Budget.

Minister for Finance Michael Noonan has stated that a 10% levy on soft drinks could earn €100m for the Exchequer.