PepsiCo Inc Pledges To Reduce The Amount Of Sugar In Soft Drinks It Sells In The European Union

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PepsiCo Inc (NASDAQ: PEP) has pledged to reduce by a quarter the amount of sugar in its soft drinks and iced teas sold in the European Union.

The beverage and snack maker is looking to cut sugar levels by 2025 and launch more nutritious – or less unhealthy – snacks, such as baked chips instead of fried chips.

The company is looking to go further by 2030, targeting a 50% reduction in sugar levels in beverages such as Pepsi Cola and 7Up.

The company plans to change the formulation of the drinks, replacing sugar with low-calorie sweeteners.

“Today in Europe almost one in three drinks we sell is sugar free and we believe this trend will continue to grow over time,” said Silviu Popovici, CEO of PepsiCo Europe.

The move follows a Tuesday statement by UNESDA, which represents the European soft drink industry, that it pushes to reduce the amount of sugar in drinks by 10% on average.

A number of European countries, including Britain, have passed legislation aimed at reducing the amount of sugar in soft drinks and hopefully lowering obesity levels, especially in children.

The UK introduced its tax on the soft drink industry in April 2018. The so-called ‘sugar tax’ has been well reported, having been announced in March 2016, and in the run-up to entry In effect of the tax, the UK soft drink industry has responded by reducing the amount of sugar in drinks by the equivalent of 45 million kilograms per year, according to government sources.

In the UK, manufacturers of soft drinks will have to pay a royalty of 24 pence per liter of drink if it contains 8 grams of sugar per 100 milliliters or 18 pence per liter of drink if it contains between 5 and 8 grams of sugar per 100 milliliters.

Given that the UK government has already introduced the tax, PepsiCo’s decision is unlikely to have much of an effect on UK operators such as maker Irn-Bru Barr (AG) PLC (LON: BAG), PepsiCo’s UK partner Britvic PLC (LON: BVIC) and mixer specialist Fevertree Drinks PLC (LON: FEVR).



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