Coca-Cola Announces Smaller Bottle and Higher Price in Face of Sugar Tax

Wednesday 17th January 2018

Coca-Cola have announced they have no plans to change their recipe and instead will reduce the size and increase the price of their soft drink when a tax on sugary soft drinks comes into force in April. The change will affect Coca-Cola Classic, and a spokesman for Coca-Cola noted that Diet Coke and Coca-Cola Zero Sugar are not affected.

This is a response that differs significantly from those of Coca-Cola’s competitors in the soft drink space, who have chosen to reformulate their drinks in order to avoid the tax as much as possible. Lucozade Ribena Suntory reformulated their drinks to use artificial sweeteners in order to avoid the tax entirely. Britvic, the UK bottler for Pepsi, have similarly revealed a focus on their lower sugar drinks, and their Robinsons and Fruit Shoot brands have avoided the tax entirely. Even AG Barr opted to reformulate their Irn Bru brand with reduced sugar. Even Coca-Cola’s other brands such as Sprite, Dr Pepper, Lilt and Fanta have reduced the amount of sugar in their drinks.

It could be seen however that Coca-Cola’s decision not to reformulate is a sign of defiance against the soft drink levy, and in terms of a PR move, it does serve to make Coke appear to be the last bastion against the onset of taxes that have forced the change of drinks a large number of the population drink. However, with Coke, there is probably more of a fear at play here, particularly given the last time there was a major change to the Coke formula.

In 1985, Coca-Cola announced the biggest change to the drink, although this was not about health and more about direct competition with their biggest competitor, Pepsi. The resulting drink, known infamously as New Coke, was initially successful and won a number of taste tests, but was very quickly dropped as the flagship brand as loyal fans of the original Coca-Cola complained about the change. The reaction was so strong that a psychologist hired by Coca-Cola to monitor calls to their hotline described that they reacted to the change as if a family member had died.

Coca-Cola would argue they are in a unique position in that there is a strong loyalty to a particular formulation of their Coca-Cola Classic brand, although in practice there have been a number of changes to the formula since its initial bottling, such as the fact it hasn’t had cocaine in its formulation for nearly a century.

Soft drinks with high amounts of sugar are a contributing factor to tooth decay and obesity, with children particularly vulnerable to the effects of marketing and the addicting qualities of sugar and caffeine. The soft drink levy, or sugar tax that was announced in 2016 and will finally come into force in April 2018 will hopefully go some way into reducing the high amounts of sugar in our diets. It will not be the only answer however, and going forward it will be interesting to see what the government does to try and stop this major problem.