Ireland wins EU OK to tax sugary drinks on health grounds

[April 24, 2018] By Foo Yun Chee

BRUSSELS (Reuters) - Ireland gained EU approval on Tuesday for a tax on sugary drinks after regulators said the levy would help the country tackle health and obesity issues.

The ruling could help head off any challenges to taxes in other EU countries, including Britain, France, Hungary, which have also imposed some form of tax on drinks with added sugar to cut consumption for health reasons.

Britain imposed its new sugar tax on soft drinks earlier this month, and such measures appear to be growing in popularity with policy makers in other countries.

Such measures have the backing of the World Health Organisation, which in a 2016 study said obesity more than doubled worldwide between 1980 and 2014 to more than 500 million people. It said a 20 percent price hike could cut consumption by the same proportion.

The European Commission, which is in charge of ensuring a level playing in the 28 country EU, said the Irish tax does not constitute state aid.

"The measure's scope and design are consistent with the health objectives pursued by Ireland, namely tackling obesity and other sugar related diseases," the EU competition enforcer said in a statement.

It said soft drinks were a particular concern compared with other sweet products because they lacked nutritional value and were especially liable to over-consumption and considered to pose a greater risk of causing obesity.

(Reporting by Foo Yun Chee; Editing by Robert-Jan Bartunek and Peter Graff)

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