Tate & Lyle’s boss believes a levy on high sugar fizzy drinks can “only be a good thing”, as more companies seek help in avoiding the tax.
Nick Hampton said the Government’s tax on fizzy drinks had spurred demand among drinks producers to reformulate their recipes so they didn’t have to suffer the extra cost.
The tax, which is charged at 24p per litre for drinks with more than 8g of sugar per 100ml and a lower 18p per litre rate for those with between 5g and 8g, was announced by former Chancellor George Osborne in 2016 and came into effect last month.
The move followed similar charges implemented by Mexico, France and Norway.
“We have worked with companies globally by helping them to take sugar out of their products in the past few years,” Mr Hampton said.
“We helped Nestle remove 40pc of the sugar in their Nesquik product.”
He added that the tax being implemented in the UK “can only be a good thing because of the capabilities we have to help companies reduce the sugar content of their products but maintain a great taste”.
Nick Hampton, who spent 20 years at Pepsi, only took control of Tate & Lyle last month after spending four years as chief financial officer.
He made his mark by simplifying the company’s structure into two divisions: primary products and food beverage. The primary products arm is predominantly US-based and deals in high volumes of sweeteners and industrial starches, while the food and beverage business focuses on helping manufacturers reformulate recipes.
Revenue growth in the food and beverage division wasn’t enough to counter the dip in primary products, meaning group sales fell 2pc to £2.7bn. But a keen eye on costs meant pre-tax profits rose nearly 23pc to £286m.
Mr Hampton also said he expected to take £100m of cost out of the business in the next four years, which cheered investors. Shares rose 9pc to 664p on the announcement, although they are still down nearly a quarter compared with five years ago.
Elsewhere, Mr Hampton revealed a 15pc stake in stevia producer Sweet Green Fields and an option to acquire the remaining 85pc at a later date.
He said stevia, a plant which is becoming more widespread as a replacement for sugar, would be a “key component” to his company’s sweetener portfolio.
While stevia “has an aftertaste” Mr Hampton said that Tate & Lyle would be able to combine it with other ingredients to produce a viable substitute for sugar.