PepsiCo Inc (NASDAQ:PEP) has pledged to cut by a quarter the amount of sugar in its fizzy drinks and iced teas sold in the European Union.
The beverages and snacks maker is looking to cut sugar levels by 2025 and launch more nutritious – or less unhealthy – snacks, such as oven-baked crisps instead of fried crisps.
The company is looking to go further by 2030, targeting a 50% reduction in sugar levels in drinks such as Pepsi Cola and 7Up.
The company plans to change the formulation of the drinks, substituting low-calorie sweeteners for sugar.
"In Europe today, almost one in three beverages we sell is sugar-free and we believe this trend will continue to grow over time," said PepsiCo Europe's chief executive officer, Silviu Popovici.
The move follows a declaration of Tuesday from UNESDA, which represents Europe’s soft drinks industry, that it would push to reduce the amount of sugar in beverages by an average of 10%.
A number of European countries, including Britain, have passed legislation aimed at reducing the amount of sugar in soft drinks and hopefully as a consequence reduce obesity levels, particularly among children.
The UK introduced its Soft Drinks Industry Levy in April 2018. The so-called “Sugar Tax” was well flagged, having been announced in March 2016, and in the run-up to the Levy becoming active the UK soft drinks industry responded by cutting the amount of sugar in drinks by the equivalent of 45mln kilograms a year, according to government sources.
In the UK, soft drink manufacturers will have to pay a levy of 24p per litre of drink if it contains 8 grams of sugar per 100 millilitres or 18p per litre of drink if it contains between 5 – 8 grams of sugar per 100 millilitres.
Because the UK government has already introduced the levy, it is doubtful whether PepsiCo’s move will have much effect on UK operators such as Irn-Bru maker Barr (AG) PLC (LON:BAG), PepsiCo’s UK partner, Britvic PLC (LON:BVIC) and mixers specialist Fevertree Drinks PLC (LON:FEVR).
Soft drink companies will only do what makes a profit, the right thing is never done, this is where governments step in to make a level playing field so all have to change!
— David Dunn #Climate #crisis #UBI (@climateguardian) July 1, 2021