26 February, 2019
As part of governmental effort to curb the increase of diabetes and obesity and to meet consumer demand for healthier diets, food and drink producers across the globe are facing pressure to reduce the sugar content of their products. One of the measures being introduced by an increasing number of governments is a "sugar tax", targeting high-sugar soft drinks, in an effort to reduce sugar intake among consumers and increase revenues from tax. Taking a look across several countries, we see a prevailing global tendency from the authorities to encourage and even require lower sugar content in lemonades/soft drinks, whereas the German authorities seem to be moving in the opposite direction, requiring more sugar in certain soft drinks, including lemonade.
Sugary beverages are highly regulated worldwide: From tax to labelling regulations
As a result of several sugar taxes in the EU, such as the UK's "Soft Drinks Industry Levy", soft drinks manufacturers, including those that produce lemonade, were incentivized to reconsider the sugar content of their product formulas. Lucozade and Ribena have reduced the sugar content of their products by more than 50% to avoid increased taxation. A similar tax in Ireland has motivated large carbonated drinks suppliers, such as Britvic, to consider reformulating their product to avoid higher taxation.
Malaysia has jumped on the "sugar tax" bandwagon by introducing an excise duty on sugar-sweetened beverages, which will be effective from 1 April 2019. Currently, there is no minimum sugar content nor other requirements in relation to the use of the term "lemonade" in the Food Regulations.
In China, while the National Standard for Fruit & Vegetable Juices and Beverages (GB/T 31121-2014) provides content requirements for different types of juices or juice beverages – from concentrated fruit juice beverages to fruit nectar – it does not have comparable standards for minimum sugar requirements in lemonade.
In Singapore, the Food Regulations ultimately seek to draw a distinction between the labelling of drinks that contain real juice from fruit, and drinks that do not, rather than distinguish between the labelling of drinks with varying sugar content. Regulation 184(2) of the Food Regulations requires any non-alcoholic drink which incorporates the name of a fruit, vegetable or flower in its name – such as LEMON – and wishes to be labelled with the suffix "-ade" without actually using the juice of that fruit in its composition, to specify "[name of fruit, vegetable or flower] flavored drink" or "imitation [name of fruit, vegetable or flower] drink".
In Switzerland, there are rather strict requirements for fruit juices, but the Ordinance on Beverages does not stipulate any additional requirements regarding the ingredients of soft drinks (with or without fruit juice in their composition). Therefore, Swiss lemonade is not obliged to contain any sugar (or sugar substitutes) to be called "lemonade".
Too little sugar in Germany
The Hamburg Consumer Protection Office (CPO) recently issued a warning letter against LemonAid Lime Lemonade – a popular low-sugar Fairtrade drink – on the basis that it does not contain the prescribed minimum sugar content of 7% for lemonades. This threshold is set by the German Food Book [1] (Deutsches Lebensmittelbuch), and specifically, the Guidelines for Soft Drinks, and addresses their manufacture, composition and properties, which aim to protect consumers from misleading information by providing clarity and accuracy about products. According to the CPO, LemonAid must either be re-named, so it is no longer called a "lemonade", or its sugar content must be increased.
So will LemonAid – and all other low-sugar soft drinks manufacturers – have to sell their beverages under different names in Germany, or adapt the recipe for the German market? The manufacturer rejected the claims, pointing out that the lemonade has been on the market since 2009 and that its product does not mislead the consumer. As Germany seems to be a lone rider in that regard, the CPO indicated that they would work towards reaching an amicable solution. So it seems that a German "sugar-gate" can be avoided.
For further information, please contact:
Chew Kherk Ying, Partner, Wong & Partners
kherk.ying.chew@wongpartners.com
[1] The German Food Book is published by the Federal Ministry of Food and Agriculture and written by a commission consisting of an industry-specific expert committee, taking into account European food law as well as international food standards, such as the FAO "Codex Alimentarius." The commissioners are representatives of different stakeholders within the food and beverage industry: scientists, trade and manufacturer associations, consumer groups, representatives of authorities, etc.
