The government has made great strides in educating the population about the need to eat five portions of fruit and veg a day. According to the Department of Health, 67% of adults are now aware of this need. Yet, two thirds of the population are still not managing to meet their 5-a-day target.
So what should the government do next? One option would be to remove the VAT discrimination against smoothies and other pure juices. Go to the supermarket today and you don't need to pay VAT on the vast majority of food. A 0% VAT rate is applied to frozen chips and pizzas, meat pies, pastries and beef-burgers. Yet all 'beverages' are taxed at 17.5%. Classed as non-essential, alongside chocolate biscuits and ice cream, beverages are exceptions to the zero rate applied to food.
Despite the government's drive behind 5-a-day, the Treasury is essentially discouraging the consumption of smoothies and fruit juices. Far from being non-essential, these products are one of the most convenient ways to get people to consume more fruit.
An Innocent smoothie is made from 100% whole crushed fruit and pure and fresh juices. This year, Innocent drinkers alone will consume in excess of 300 million portions of fruit. Together with other manufacturers of natural, 100% fruit drinks, we are helping millions of consumers towards their 5-a-day target. Yet, while you don't pay VAT on fruit, you will on your smoothie.
Innocent is considering a legal challenge to this anomaly. The legal definition of a beverage is something drunk to 'increase bodily fluid levels' and 'slake one's thirst'. Well, this clearly does not apply to our product. Our research shows the primary reason people consume smoothies is to get healthy fruit portions into their diet.
Declassify smoothies as a beverage and they can be zero-rated. We believe the government should remove VAT from all pure juices, by which I mean 100% not-from-concentrate or freshly squeezed juices (we wouldn't propose juice from concentrate, as the concentration process removes significant amounts of vitamin C and antioxidants). By removing VAT on smoothies and pure juices, the government could increase sales by some 15%. That's equivalent to an additional half a billion portions of fruit consumption each year.
So why doesn't the Treasury do this? Well, for starters, it can't. Not without EU approval. VAT and the EU is a dark and murky place - suffice to say that adding more products to zero-rating is not allowed under EU rules, unless it is done across the EU. And that would take a lot of political willpower.
But the Treasury can reduce VAT on smoothies and pure juices to, say, 5% without EU approval and this would have just as significant an impact on consumption.
The Treasury offered two counter-arguments: first, that tax is an overly blunt instrument and, second, that education would be a better way to spend the money. But if reducing VAT can encourage another half a billion portions of fruit consumption a year, surely it is worth it. The investment in education argument doesn't quite wash either. The DH's own research shows we are all pretty much aware we ought to be eating five portions, so why aren't we actually doing it?
The government needs to get tough on anarchic and ridiculous tax laws. Not only is it a nonsense to be taxing healthy drinks, it is immoral. A simple change in the rules could massively improve fruit consumption, and have a real impact on the health of the nation.
So what should the government do next? One option would be to remove the VAT discrimination against smoothies and other pure juices. Go to the supermarket today and you don't need to pay VAT on the vast majority of food. A 0% VAT rate is applied to frozen chips and pizzas, meat pies, pastries and beef-burgers. Yet all 'beverages' are taxed at 17.5%. Classed as non-essential, alongside chocolate biscuits and ice cream, beverages are exceptions to the zero rate applied to food.
Despite the government's drive behind 5-a-day, the Treasury is essentially discouraging the consumption of smoothies and fruit juices. Far from being non-essential, these products are one of the most convenient ways to get people to consume more fruit.
An Innocent smoothie is made from 100% whole crushed fruit and pure and fresh juices. This year, Innocent drinkers alone will consume in excess of 300 million portions of fruit. Together with other manufacturers of natural, 100% fruit drinks, we are helping millions of consumers towards their 5-a-day target. Yet, while you don't pay VAT on fruit, you will on your smoothie.
Innocent is considering a legal challenge to this anomaly. The legal definition of a beverage is something drunk to 'increase bodily fluid levels' and 'slake one's thirst'. Well, this clearly does not apply to our product. Our research shows the primary reason people consume smoothies is to get healthy fruit portions into their diet.
Declassify smoothies as a beverage and they can be zero-rated. We believe the government should remove VAT from all pure juices, by which I mean 100% not-from-concentrate or freshly squeezed juices (we wouldn't propose juice from concentrate, as the concentration process removes significant amounts of vitamin C and antioxidants). By removing VAT on smoothies and pure juices, the government could increase sales by some 15%. That's equivalent to an additional half a billion portions of fruit consumption each year.
So why doesn't the Treasury do this? Well, for starters, it can't. Not without EU approval. VAT and the EU is a dark and murky place - suffice to say that adding more products to zero-rating is not allowed under EU rules, unless it is done across the EU. And that would take a lot of political willpower.
But the Treasury can reduce VAT on smoothies and pure juices to, say, 5% without EU approval and this would have just as significant an impact on consumption.
The Treasury offered two counter-arguments: first, that tax is an overly blunt instrument and, second, that education would be a better way to spend the money. But if reducing VAT can encourage another half a billion portions of fruit consumption a year, surely it is worth it. The investment in education argument doesn't quite wash either. The DH's own research shows we are all pretty much aware we ought to be eating five portions, so why aren't we actually doing it?
The government needs to get tough on anarchic and ridiculous tax laws. Not only is it a nonsense to be taxing healthy drinks, it is immoral. A simple change in the rules could massively improve fruit consumption, and have a real impact on the health of the nation.
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