A tax break for imported sugar isn’t sweet for the public health or the environment – Inside track

This post is by Ali Hines, sugar campaigner at Foodrise

A significant decision passed largely unnoticed in Chancellor Rachel Reeves’ hotly anticipated autumn budget. She announced that the autonomous tariff quota (ATQ) on raw cane sugar would be renewed, a trade measure that allows raw cane sugar to be imported into the UK tariff-free, to the detriment of the environment and public health.

Not only would the ATQ be renewed, it would also be increased from 270,000 tonnes to as much as 325,000 tonnes. This decision came into force in January and lasts until the end of 2033, representing an annual public subsidy for sugar imports of just under £90 million.

The environmental implications are troubling
Since the ATQ was introduced, Brazil has become the UK’s dominant supplier of raw cane sugar, overtaking many African, Caribbean and Pacific producers. This reflects the origin-neutral design of the quota, which favours large scale agro-industrial exporters capable of delivering bulk volumes quickly and cheaply.

Sugarcane now covers nearly ten million hectares in Brazil and is a significant driver of indirect deforestation. As its growth expands over former pastureland, cattle are pushed further into the Amazon and the Cerrado, two globally important ecosystems already under severe pressure. These risks have intensified since Brazil dismantled federal zoning rules that previously restricted sugarcane expansion near the Amazon and Pantanal wetlands. While sugar’s direct footprint may be smaller than soy or beef, its role in land use change is far from negligible.

Sugar production is also highly water intensive, requiring between 1,200 and 1,500 litres of water per kilogram. Processing plants place heavy demands on rivers and groundwater, while fertiliser runoff and waste products such as vinasse pollute waterways, contributing to ecosystem degradation and algal blooms.

There is also the carbon cost of distance. Importing sugar from Brazil involves long transatlantic shipping routes, adding substantial transport emissions. Estimates suggest that transport alone accounts for around 19 per cent of global food system emissions.

Priorities are contradictory
But this isn’t just a questionable decision for the environment. The announcement stood in stark contrast to the government’s recent strengthening of the soft drinks industry levy, which was widely welcomed as a public health measure. Yet, the expansion of the ATQ, effectively increasing the UK’s supply of cheap sugar, received little scrutiny, despite its implications for health, climate and land use.

The UK already consumes far more sugar than recommended. NHS guidelines suggest a national consumption level of around 0.75 million tonnes per year, yet the UK’s total sugar supply stands at approximately 1.91 million tonnes, nearly three times the recommended level. Around a quarter comes from imported raw cane sugar.

Against this backdrop, the decision to expand tariff-free imports raises a fundamental question: why is trade policy being used to increase access to a product of which the government is simultaneously trying to reduce consumption?

In 2024, the government launched a stakeholder consultation to inform the future of the ATQ from 2025 onwards, followed by further engagement in early 2025. Historically, ministers had framed these decisions as a balancing act between multiple objectives: supporting domestic production, preserving preferential access for developing countries, promoting the UK’s trade agenda and considering impacts on public health.

However, by 2025, the government appeared to shift its approach. It stated that decisions on whether to renew the ATQ would be guided by the principles set out in the Taxation (Cross-border Trade) Act 2018. These emphasise the interests of UK consumers and producers, the promotion of external trade and productivity and the extent of competition in the market. Notably absent is any explicit commitment to public health as a primary decision making criterion. Instead, health considerations appear to have been downgraded to one factor among many, a subtle but significant shift.

When combined with sugar’s well-documented links to obesity, diabetes and other chronic diseases, the result is a product that is both socially and environmentally costly.

Trade policy cannot continue to incentivise environmentally destructive supply chains. It is time to confront the real cost of sugar and align UK trade policy with the goals of protecting people and the environment.

Photo by Immo Wegmann on Unsplash