Most people don’t think twice before grabbing their go-to milkshake or iced latte from the supermarket shelf.
But those quick indulgences might soon feel a little heavier on the wallet.
That’s because the government has decided to stretch the reach of the sugar tax, and this time, many popular milk-based drinks are no longer being spared.
A Shift in Policy That Shakes Up Everyday Treats
Health Secretary Wes Streeting confirmed that the long-standing exemption for pre-packaged milk drinks is being removed.
Under this update, the sugar threshold for triggering the levy is being nudged down from 5g per 100ml to 4.5g per 100ml, meaning a wider range of drinks will now fall under the tax net.
Streeting told MPs that the government “will not look away as children get unhealthier,” stressing that the move is tied to a broader fight against rising obesity levels.
A Boost for Public Health — and for the Treasury
Although the primary message centres on improving the nation’s health, the financial impact isn’t being ignored.
This expanded levy could bring in roughly £100 million a year, offering a timely cushion for Chancellor Rachel Reeves as she prepares for a budget overshadowed by a sizeable gap in the national accounts.
The change, which comes after a formal consultation, will apply to ready-made milk coffees and milkshakes on shop shelves.
Drinks freshly made in cafés or restaurants, however, are not included.
How the Rules Are Changing for Milk and Milk Alternatives
One key update is the introduction of a new “lactose allowance,” which takes into account the natural sugars found in real milk.
This allows milk-based drinks to be taxed more fairly, distinguishing natural lactose from added sugars.
Plant-based drinks aren’t getting the same treatment.
Beverages like oat milk or soya blends that contain added sugars beyond their natural content will now be taxed just like regular soft drinks.
The Sugar Tax So Far — and Why It’s Expanding
The Soft Drinks Industry Levy has been in place since April 2018.
Until now, producers have paid at least 18p per litre for drinks containing 5g or more of sugar per 100ml.
The lowered threshold, due to take effect in April 2027, means many more drinks will be affected.
The tax was originally designed to push manufacturers toward healthier formulas — either by reducing sugar levels or shrinking portion sizes.
The Treasury says the strategy worked, with average sugar levels in qualifying drinks falling by 46% between 2015 and 2020.
Obesity: The Bigger Issue Behind the Tax Expansion
Minister Karin Smyth reiterated on Times Radio that obesity remains “the major challenge” facing the NHS today.
While revenue does matter, she emphasised that curbing obesity — especially among young people — is the real driving force behind these decisions.
The government has already taken steps such as restricting junk-food advertising aimed at children.
Smyth explained that becoming obese early in life can reduce long-term opportunities and health outcomes, making intervention essential for the next generation.
What’s Next?
The upcoming Budget will reveal how this expanded sugar tax fits into the government’s wider health and financial strategies.
Manufacturers now face increasing pressure to reformulate their drinks, shoppers may start seeing higher prices, and the wider conversation about obesity — especially in children — is expected to pick up momentum in the months ahead.
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