Tax hike could curb Irish gum growth

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Related tags: Gum, Chewing gum, Confectionery, Mintel

A new gum tax in Ireland proposed to help street cleaning could add
5 to 10 cents to the price of a packet of gum, potentially curbing
growth in a chewing gum market which has been revitalised by sales
of healthy and oral hygiene products, reports Lindsey
Partos.

Sales of chewing gum have continued to grow strongly in the UK, driven by the positive influence of oral hygiene and health issues.

But the possible move by the Irish government to impose the world's first tax on chewing gum, could eat into Irish profits for US gum giant Wrigley's and UK-based Cadbury-Schweppes.

An independent study into ways to curb littering in Ireland suggests this week the money raised from a 10 per cent levy on gum, about 5 cents a pack, would raise an estimated €4-5m per year towards cleaning costs.

"In 2002, chewing gum was identified as the single largest component in the food litter category, and as the second largest component of overall litter after cigarettes,"​ said Irish environment minister Martin Cullen.

The minister added that the findings of the study, that also suggests a tax on fast-food and ATM rubbish, will form the backbone of a debate between the public, industry and NGOs before any government decision is taken.

Chewing gum has enjoyed strong growth in recent years on the back of consumer demand for oral hygiene products - 'mouthfresh' - and health issues that have pushed new product development in sugar-free products.

Market analysts Mintel report that since 1998 the chewing gum and bubble gum market has risen by some 34 per cent to reach €488m last year.

"Chewing gum and, to a lesser extent, mints have perceived benefits which protect them from the negative factors affecting other sectors of the sugar confectionery market,"​ said the firm.

The chewing gum 'war' between gum behemoths Cadbury Trebor Bassett and Wrigley has pushed product innovation in the sector with both firms making high profile launches to beat the competitor.

"Competition in the market is set to increase significantly in the next two years, with many of the familiar, traditional brands falling into serious decline,"​ foresees Mintel.

Related topics: Ingredients, Gum

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