Tesco has escaped the government’s sugar tax by cutting the amount of sugar that its own-label soft drinks contain to below the 5 grams per 100ml at which the levy is supposed to come in.

The supermarket giant’s move was applauded by the government, which has attempted to concentrate industry minds on reformulation. Tesco, which announced it was changing the formula for all 251 of its own-brand soft drinks, declined to say how it had reduced the sugar content below taxable levels.

“This is just one part of our plans to make the food on our shelves healthier by reducing levels of sugar, salt and fat in our own brands,” said Matt Davies, Tesco’s chief executive for the UK and Republic of Ireland.

“We have worked to make sure our soft drinks still taste great, just with less sugar. Tesco customers are now consuming on average over 20% less sugar from our soft drinks than in 2011. We’re hoping this initiative will help make it a little easier for our customers to live more healthily.”

When asked how it had made the reformulation and whether it involved low calorie sweeteners or extra fruit, Tesco replied in a statement: “We’ve worked really hard to make sure the drinks still taste great and we’ve rigorously tested them with our customers.”

The government expressed satisfaction that the threatened tax was exerting the pressure it wanted on the soft drinks industry.

“It is great to see Tesco leading the field by reducing the level of sugar in their own-brand drinks,” said Nicola Blackwood, the public health minister. “It is proof that taking added sugar out of drinks is both possible and in line with what customers want.

“The government’s sugar levy is designed to encourage manufacturers to cut the sugar from their products before the levy comes into force in 2018. Responsible actions like this are so important in our fight against childhood obesity.”

The tax was announced by the then chancellor, George Osborne, in his budget in March but will not take effect until April 2018. It will affect producers and importers of soft drinks that contain “added sugar”.

Health campaigners and the government are particularly pleased with Tesco’s action because they are one of the biggest suppliers of own-label colas. The cut in sugar to 5g per 100ml represents a 50% reduction. The hope is that other manufacturers will follow suit.

Fruit juices will not be classified as soft drinks for the purposes of the tax, even though there is plenty of scientific evidence that they contain high quantities of natural sugars and therefore can contribute to obesity. Barry Popkin, professor of nutrition at the University of North Carolina at Chapel Hill School of Public Health, has said fruit juices and smoothies are the new danger, because of the assumption that they are healthy.

The consultation document on the soft drinks levy says “the legal definition of ‘added sugars’ used for the levy should exclude fruit juice, fruit puree, and fruit juice concentrate”. That leaves it open to soft drinks manufacturers to add extra fruit to boost the sweetness of their drink.

The Obesity Health Alliance, which brings together a number of health charities and groups concerned about the health impact of the nation’s weight, applauded the Tesco announcement and the implication that the tax threat was working, but said that was not enough.

“Just last week, new figures confirmed that over a fifth of children are overweight or obese by the time they start primary school, and a third by the time they reach year six,” it said in a statement. “So to try to stem the growth in obesity, it is vital that other supermarkets and food and drinks manufacturers follow Tesco’s lead and reformulate their own products too.

“However, reformulation alone will not solve this problem. It needs to be one of several measures that challenges the obesogenic environment that surrounds us, including closing loopholes to protect children from junk food marketing on TV and online.”

Prof Russell Viner, the Royal College of Paediatrics and Child Health’s officer for health promotion, said: “This is really positive news and we congratulate Tesco on this move. Only last week figures showed that over a third of children are overweight or obese by the time they reach year six, so it is vital that this acts as a catalyst to inspire other producers and retailers to make similar changes.

“But this is just one step of many needed to make a serious impact on this deep seated problem. That is why in addition to reformulation we need to see restrictions on junk food advertising before 9pm, greater support for parents to reach and maintain a healthy weight before, during and after pregnancy and an extension to the national child measurement programme. It is only by taking a wider, more holistic approach that we will be able to overcome this national crisis.”