A category-based approach to a manufacturer levy on unhealthy food: Considerations and opportunities

The Recipe for Change campaign is exploring new food levy approaches to encourage healthier food production and improve public health, either by taxing businesses on all salt and sugar used or by targeting specific high-sugar and high-salt product categories based on their nutritional content.

This briefing explores the second of these options: a category-based levy on foods high in salt and sugar. Unlike broad levies on ingredients like salt and sugar, this approach would target specific food categories - such as biscuits, cakes, ready meals, and breakfast cereals - that are significant contributors to added sugar and salt in the diet, particularly for children. The aim is to incentivise reformulation and level the playing field for businesses that already prioritise healthier products. The campaign draws on the success of the Soft Drinks Industry Levy (SDIL), which has demonstrably reduced sugar content in beverages while generating significant revenue for health initiatives.

The briefing outlines key considerations for implementing such a levy, including defining target categories, focusing on pre-packaged foods with clear nutrition labelling, and initially applying the levy to in-home retail sectors for ease of implementation. It highlights that progress under voluntary reformulation programmes has been limited and uneven, with many high-sugar categories showing minimal change. Public support is high - especially for levies on sweet foods and if revenue is reinvested in children’s health - making this an opportune time for policy action. The report concludes that a well-designed, category-focused levy could be a practical and effective fiscal tool to accelerate healthier food supply and improve population health.

This briefing sits alongside our report from February 2025:

Incentivising reformulation: The case for fiscal levers to strengthen the UK’s reformulation programmes