Market Failure

13 July 2026 · United Kingdom

HMRC confirmed that from 1 January 2028 the Soft Drinks Industry Levy threshold will fall from 5g to 4.5g of added sugar per 100ml, while exemptions for milk-based and milk-substitute drinks will be removed. It is a strong market-failure case because the government expects firms to respond by reformulating products, so the intervention changes incentives before many consumers ever pay a higher price.