A tax on soft drinks could result in thousands of job losses, according to a new report.
The study, by Oxford Economics on behalf of the British Soft Drinks Association, said the proposed levy could lead to 4,000 job losses. They also said the hospitality industry and smaller retailers would be hit the hardest.
The proposed sugar tax on drinks such as Coca-Cola, Pepsi and Red Bull will comes into force in 2018.
Drinks with 5g of sugar per 100ml will face a lower tax than those with more than 8g of sugar per 100ml, under plans unveiled by the then chancellor, George Osborne as part of the Budget in March this year.
Gavin Partington, director-general of the British Soft Drinks Association, which is providing funding for the campaign, said: "We absolutely agree with the Government that obesity levels are too high and action is needed, but burdening businesses and consumers with an ineffective tax is not the answer.
"We know from the evidence around the world where they've tried a tax that it will not make a difference to obesity. What it will do, as this report shows, is damage thousands of businesses across the entire soft drinks supply chain, from farmers to manufacturers, to convenience stores and the pub and restaurant trade.
"At a time of economic uncertainty, the Government needs to be supporting these businesses and working with industry to support actions that are already making a difference, such as reformulation, smaller packs, and more marketing of the many no-sugar options now available."
A Treasury spokesman said: "The levy is about getting producers to use healthier ingredients to reduce the levels of added sugar in products our children consume. If they reformulate, they won't have to pay.
"Companies have two years before the levy comes into force to adapt, and it's designed to encourage them to reformulate their products so there is less added sugar in soft drinks. Already Britvic has said it will reduce calories in their drinks by 20% over the next four years in response to the levy.
"British children are currently consuming three times the recommended amount of sugar and health experts agree there is a specific problem with sugar-laden soft drinks."
A joint statement made by the Obesity Health Alliance, a coalition of over 30 charities including Diabetes UK, British Heart Foundation and Cancer Research UK, medical royal colleges and campaign groups, said: “"The soft drinks industry levy will save money tomorrow by helping to tackle children's obesity today.
"Sugary soft drinks have no nutritional value and are the single biggest contributor to a child's sugar intake, and high consumption of sugar is one of the factors fuelling the obesity crisis.
"A third of children are overweight or obese by the time they leave primary school, putting them at a greater risk of serious health conditions later in life such as Type 2 diabetes, cancer, heart and liver disease and associated mental health problems.
"These conditions place an immense toll on our nation's health and our already-stretched health service. The levy has huge potential help tackle obesity and save the NHS money."