Catalunya taxes soft drinks and may extend levy to cakes and pastries

CATALUNYA has applied a blanket tax on soft drinks and is considering doing so on cakes and pastries in a bid to try to change eating habits.

Fizzy drinks, squash, energy drinks – including replenishment refreshments typically drunk in summer to balance glucose and electrolytes lost through sweating – sweetened milky drinks, fruit juices with added sugar, flavoured water, and even tea and coffee have been hit by the new levy which came into effect this week.

Tax ranges from eight to 12 céntimos per litre, depending upon sugar content, with the most sugar-laden attracting the top rate.

Depending upon sugar content, volume and the original cost of the product, this means price hikes of between 8% and 50%.

The move was initially planned for November but put off because of Catalunya's 'Parliamentary agenda'.

Doing so meant just 48 hours between the tax being agreed in the 2017 budget and actually being applied, which drinks manufacturers appealed against as this did not give them time to adapt.

The new tax is expected to earn the regional government nearly €31 million this year and, in a full calendar year, around €41.3m.

Regional government deputy president Oriol Junqueras says the drinks-tax law, added on March 30 as an amendment to the 2017 budget, is aimed at 'encouraging changes in dietary habits as recommended by the World Health Organisation'.

Ordinary supermarket consumers will bear the brunt of the new tax, although drinks sales elsewhere will affect the retailer.

Bars, cafés and restaurants which buy in soft drinks to serve to customers will bear the extra tax, although it will then be up to the owners whether or not to pass the additional cost onto the punters.