Until now, dairy exemptions had applied to the levy – but they now face the axe as Ms Reeves desperately attempts to fill the country’s economic black hole.
According to reports, the changes will take effect from April 2027 and could net the Treasury up to £100m.
The Treasury is yet to comment on the reported tax hike.
Tory Shadow Chancellor Mel Stride hit out at the move, saying: “If these reports are true, Labour’s new milkshake tax moves the goalposts yet again for an industry that’s already cut sugar and made changes responsibly.
“It will see businesses that played by the rules punished, with products suddenly dragged into the tax net – all to save Rachel Reeves’s skin.”
It comes after Ms Reeves U-turned on her plan to hike income tax in a bid to fill the budget black hole.
Reeves had appeared to all but confirm she would be raising income tax last week, breaking from her party’s 2024 election manifesto pledge.
The Chancellor had told the public in a Downing Street press conference last week that “everyone has to play their part” in fixing Britain’s broken finances.
The speech was widely interpreted as confirmation that the Treasury would raise the basic rate of income tax by 2 per cent.
But last week, the OBR told the Chancellor the hole in the nation’s finances is closer to £20billion, rather than the previously feared £30billion.
This meant her income tax increase could be shelved and replaced with a so-called “smorgasbord” approach.
