High-sugar milkshakes, flavoured milks, yoghurt drinks and ready-to-drink coffees will face the UK’s soft drinks levy from 2028, in a major shake-up for beverage manufacturers. The Government /confirm/ied the sugar tax expansion on 25 November, closing a longstanding loophole that left many sugary dairy and plant-based drinks untaxed despite containing levels comparable with fizzy drinks.

Under the new rules, the sugar threshold will dro from 5 grams to 4.5 grams per 100 millilitres, pushing more products into taxation unless companies reformulate.

Pre-packed drinks sold in cans, bottles and cartons will be affected; unsweetened milk and milk alternatives remain exempt, with a new “lactose allowance” ensuring natural milk sugars are not taxed.

Health and Social Care Secretary Wes Streeting said the move is designed to make reformulation an industry norm rather than a consumer burden.

An unhealthy start to life holds kids back from day one, especially those from poor backgrounds like mine. We’re on a mission to raise the healthiest generation of children ever, and that means taking on the biggest drivers of poor health.

The levy has already shown that when industry cuts sugar levels, children’s health improves. So, we’re going further. A healthier nation will mean less pressure on our NHS, a healthier economy and a happier society. It’s a simple change that is part of this government’s mission to give every child a healthy start to life.

Reformulation pressure ramps up

Manufacturers and importers have until 1 January 2028 to reduce sugar levels if they want to avoid additional charges. Drinks containing between 4.5 grams and 7.9 grams of sugar per 100 millilitres will enter the lower levy band, while those above 8 grams remain in the higher band. Drinks served over the counter in cafés or coffee shops remain exempt.

The first phase of the levy, introduced in 2018, triggered widespread recipe changes in the soft drinks category as brands moved below the threshold to avoid the tax. The Government expects dairy and plant-based drink producers to follow the same pattern.

Strong evidence of sugar reduction and sales growth

Government data link the levy to a near 50 percent reduction in average sugar in eligible drinks between 2015 and 2024. During that period, volume sales of reformulated products increased by 13.5 percent, undermining claims that lower-sugar products struggle commercially.

The Department of Health and Social Care also attributes the policy to drops in dental hospital admissions. Since 2018, decay-related tooth extractions have reduced by more than 28 percent among 0 to 4 year olds and by over 5 percent in children aged 5 to 9. Officials estimate the new measures could prevent almost 14,000 adult obesity cases, alongside major savings for the NHS and wider economy.

England’s Chief Medical Officer, Professor Sir Chris Whitty, said:

Creating an environment wher children are encouraged to have drinks which contribute to increased levels of obesity can harm their health for the rest of their lives… Extending the sugar levy is likely to have further benefit for child health.”

Public health groups say the move is “long overdue”

Health organisations have long argued that sugary dairy drinks should be brought into scope due to their heavy marketing as “nutritious” despite containing high levels of added sugar.

Katharine Jenner, Executive Director at the Obesity Health Alliance, said:

Ending the exemption for sugary milkshakes and bringing more sugary soft drinks into the levy is a sensible and long-overdue step to protect children’s health – especially their teeth. The Soft Drinks Industry Levy has already removed billions of teaspoons of sugar from the nation’s diet without harming industry growth, proving that clear, consistent rules are effective.”

Diabetes UK said the extension is crucial given the rise of type 2 diabetes in younger people. Helen Kirrane, Head of Policy and Campaigns, said:

With cases of type 2 diabetes continuing to rise at an alarming rate, particularly in younger people, we need bold action to cut unnecessary sugar from food and drink. The Soft Drinks Industry Levy has already substantially reduced the sugar in soft drinks, lowering the amount of sugar consumed by children. Expanding it to include milk-based and milk-alternative drinks, which can contain large amounts of hidden sugar, is a welcome step forward.”

Youth groups argue the drinks are aggressively promoted to teenagers. Bite Back activist Dev said:

The amount of sugar in these products has been completely outrageous, and young people like me have been saying it for years. We’re targeted with these drinks everywher — in supermarkets, on our streets, and across our socials — so this is a really important step. But it can’t stop here. We need this to be part of a bigger package that also strengthens advertising rules.”

Part of wider reforms on unhealthy food and drink

The Government’s move sits alongside broader measures aimed at reshaping the food environment. Planned reforms include a junk food advertising ban before the 9pm watershed, a ban on energy drink sales to under 16s, new healthy food standards to influence the “average shopping basket”, and powers for local authorities to block fast food outlets near schools.

Together, the changes mark a tightening regulatory landscape that will increasingly pressure brands to reformulate products once sold as indulgent or “nutritious”, particularly those marketed to children and teenagers.