Juice maker narrowly avoids Dutch sugar tax by adding “a hint of dairy”

Juice maker Appelsientje is circumventing the recently increased sugar tax with the new "Appelsientje FruitDrink" - fruit juice "with a hint of dairy." The tiny bit of dairy in the fruit juice exempts the drink from the sugar tax, BNR reports.

The Appelsientje FruitDrink is currently only available at Albert Heijn, where a regular pack costs 1.99 euros. A regular pack of Appelsientje orange juice costs 2.89 euros.

"That is permitted on current legislation," outgoing State Secretary Marnix van Rij of Taxation and Tax Authority told the broadcaster. He added that he would examine the exception for dairy drinks in the sugar tax, officially called the consumption tax on non-alcoholic drinks. The tax nearly tripled at the start of this year to 26 cents per liter of soft drinks, energy drinks, and fruit juices.

According to IJSbrand Velzeboer, a food technologist and director of Scienta Nova, the exemption for dairy drinks creates a loophole in the law that food producers can use to avoid the consumption tax. Fruit juice can fall under the exemption if it contains as little as 0.02 percent milk fat. "So you're really crazy if you don't add a little bit of dairy as a juice manufacturer," he told BNR. "The legislator was really asleep at the wheel here."

The Tweede Kamer, the lower house of the Dutch parliament, finds the loophole unacceptable. "It is bizarre that a producer uses these kinds of clever tricks to avoid the sugar tax," said Inge van Dijk of the CDA. "So the law is not working properly now." She thinks a system in which the amount of added sugar in drinks determines the tax rate is a better idea. "That would make these kinds of tricks impossible."

A spokesperson for Riedel, Appelsientje's parent company, told BNR that it is just trying to keep its products accessible to everyone. The sector faces increased consumption taxes on top of much higher fruit prices. "That is why, in addition to our ambition to make a tasty and healthy version of our well-known drinks, we wanted to bring a drink to the market that is well-priced and, therefore, accessible to everyone." The spokesperson added that FruitDrink is cheaper because of the tax exemption and because it contains less fruit.