A membership group that represents businesses who account for roughly 20% of UK household expenditure on food and support some 130,000 jobs across the UK has said the Governments extension to the Soft Drinks Industry Levy to milk-based drinks, which was announced at the Budget yesterday (26/11/25) was ‘unwelcome, but expected.’
“The big development for our members in the dairy sector is the extension of the Soft Drinks Industry Levy to milk-based drinks, which was unwelcome, but expected.” said Rod Addy, Director General of the Provision Trade Federation.
The Provision Trade Federation (PTF) is a food trade association representing processing, manufacturing and trading companies that cover a wide range of staple provisions e.g. dairy products, cheese, butter, powders, yogurt, short life dairy desserts and dairy drinks, pork, bacon, ham and fishery products, all sourced from UK, EU and international supply chains.
Collectively these sectors account for roughly 20% of UK household expenditure on food (around £24 billion a year) and support some 130,000 jobs across the UK.
“PTF members continue to work hard to enable dairy products to contribute to a healthy, balanced diet and we support the need to reduce added sugars in products to combat obesity and dental caries.” Rod Addy continued.
“We are relieved that the government chose to listen to our arguments and lessen the impact on industry by opting for a reduced lactose allowance of 4.5g per 100ml rather than 4g in products, which will not count towards sugar content for the purpose of drinks tax.”
“Lactose is a naturally-occurring milk ingredient and levels have been calculated based on average amounts in semi-skimmed milk.”
“Dairy products suppliers have already done much to reduce sugar in milk-based drinks, particularly those with high milk content, as well as yogurts.”
“Could have been far worse far worse for business.”
“For all the hype around this budget, it could have been far worse for business.” Rod Addy continued. “That said, arguably much of the damage was already done this time last year.”
The PTF have been in existence for nearly 140 years and lobby on behalf of their members acting as the ‘voice of the industry’ in close discussions with Government and other policy makers/influencers.
“Meanwhile, while plastics packaging tax is going up in line with inflation from April next year, no further rises have been announced and, all things considered, that is good news for food businesses.”
“The fact that the government has also committed to legislating for mass balance in calculating packaging tax may also lead to manufacturers paying less in tax than they may otherwise have done, which is also a relief. They have had to face the introduction of separate Extended Producer Responsibility charges for packaging disposal as well as National Insurance and Minimum and Living Wage increases, plus continued import and export costs associated with Brexit.”
“Free funding for SME training for apprentices under 25 is good news for businesses of that size, while an anticipated rise in fuel duty from 2026 will not be good news for logistics firms, or suppliers which may end up paying more for their services.” Addy continued.
“It still represents increased business costs.”
“As far as other issues in the budget are concerned, the freeze on income tax thresholds will leave less in consumers’ pockets, so may dampen spending to a degree. That said, consumers may still end up feeling relieved in view of what some of the worst fears, which have not been realised and the rise in minimum wage and lifting of the child benefit cap may offset this. Of course, it still represents increased business costs. The freeze in rail fairs will also help keep costs low for commuters.”
