Tesco says own-brand soft drink prices will not rise after sugar levy

LONDON (Reuters) - Britain's biggest supermarket chain Tesco (TSCO.L) said on Tuesday the price of its own brand fizzy drinks will not increase after a sugar levy comes into force this week as they already fall below a government-imposed threshold.

Britain will implement the levy from April 6 on makers of sugary drinks, a move advocated by health campaigners arguing that they are a source of empty calories.

A charge of 18 pence ($0.25) per litre will be levied on drinks containing 5 grammes or more of sugar per 100 millilitres and 24 pence per litre on drinks containing 8 grammes or more.

But Tesco said it had spent years cutting the level of sugar in its own label products and will not be subject to the levy.

"Over the last decade, we've been working in partnership with our suppliers to make our own-label soft drinks healthier, by reformulating them to reduce sugar content," said Head of Soft Drinks Phil Banks.

"This work has meant that we've been able to cut over 9 billion calories from customers' annual diets," he said.

Tesco, which has 28 percent market share in Britain and also operates abroad, said 85 percent of the drinks sold in its stores will be exempt from the charge although some brand prices will rise.

But cuts in sugar, including to soft drinks Irn Bru, known as Scotland's second national drink, have prompted outrage among some fans.

Confectioner Nestle (NESN.S) also said last month it was launching a lower-sugar Milkybar in a bid to partly address one of Big Food's toughest challenges - how to make junk food healthy but keep it tasty.

The "war on sugar" being waged by governments and consumers to combat public health emergencies like diabetes is slowing growth in global demand, challenging countries such as Brazil and India reliant on the sector.

(The story corrects millimetres to millilitres in third paragraph)

(Reporting by Costas Pitas; editing by Stephen Addison)