LONDON • Britain is to join a growing band of countries taxing excessive sugar levels in soft drinks as it tries to cut spiralling childhood obesity levels.

Chancellor of the Exchequer George Osborne said yesterday that the levy on sugar-sweetened drinks will be introduced in two years' time as Britain battles some of the worst obesity rates in Europe. Official data last year showed that 61.9 per cent of British adults and 28 per cent of children aged between two and 15 are overweight or obese.

"I can announce that we will introduce a new sugar levy on the soft drinks industry," Mr Osborne said, unveiling the measure in his annual Budget statement.

He said the tax will be levied on the volume of sugar contained in sweetened drinks that companies produce or import. There will be two bands - sugar content above 5g and 8g per 100ml. It is believed that the most popular soda drinks fall within the upper band.

Mr Osborne said the levy is targeted at manufacturers to encourage them to reduce the sugar content of their products and to promote low-sugar or no-sugar brands.

Pure fruit juices and milk-based drinks will be excluded. The levy could increase the price of a 2-litre bottle of own-brand cola by up to 80 per cent.

The tax will raise an estimated £520 million (S$1 billion) a year, which will be used to fund sports activities in schools, Mr Osborne said. He said the delay in implementation will "give companies plenty of time to change their product mix".

"Obesity drives disease," Mr Osborne said. "It increases the risk of cancer, diabetes and heart disease, and it costs our economy £27 billion a year - that's more than half the entire National Health Service pay bill.

"One of the biggest contributors to childhood obesity is sugary drinks. A can of cola typically has nine teaspoons of sugar in it. Some popular drinks have as many as 13. That can be more than double a child's recommended added sugar intake... Five-year-old children are consuming their body weight in sugar every year."

Mr Osborne said experts predict that within a generation more than half of all boys and 70 per cent of girls could be overweight or obese.

Celebrity chef Jamie Oliver, who has long campaigned for a sugar tax, hailed the surprise announcement. "We did it!" he said on Instagram.

Mr Duncan Selbie, chief executive of Public Health England, said: "A sugary drinks levy is fabulous news for children and families in helping them to cut back on sugar. This will reduce the risks of obesity, tooth decay and other life-threatening diseases."

Shares in soft drink producers plunged after the announcement. A.G. Barr, producer of the popular Scottish drink Irn Bru, dropped 5.4 per cent, while squash maker Britvic fell 2.9 per cent.

Dr Ian Johnson, nutrition researcher and emeritus fellow at the Institute of Food Research, joined a number of health experts in welcoming the new tax.

"It sends out an important message, and I believe it is a valuable first step towards bringing obesity and its associated illnesses under control in the UK," he said.

Finland has had a similar levy since the 1940s, while France introduced one in 2012 and Mexico in 2013. South Africa will introduce one next year.

AGENCE FRANCE-PRESSE, XINHUA