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Danish food industry sources slam 'fat tax'

By Ben Bouckley , 14-Jan-2011

Sources within the Danish food industry have criticised the country’s new blanket tax on saturated fats in foods, claiming it will harm productivity and could even worsen the population’s health.

Denmark introduced a tax based upon levels of saturated fats in all foods at the start of 2011, but industry sources say the levy is harming business, and also encourages food additive use to replace lost flavours and textures.

According to the Danish government-funded Forebyggelses Kommisionen (Prevention Commission), which assesses the nation's health priorities, if the variable tax is levied for 10 years it will increase average life expectancy amongst the Danish population by 5.5 days.

Tax promotes additive-rich food?

However, industry bodies such as the Danish Chamber of Commerce oppose the proposal because of its potential damage to productivity and imports, and the Chamber says the tax could even promote food with more harmful additives as an unwanted consequence.

“The shift from saturated to unsaturated fats may be expected, but it is not necessarily desirable from a health perspective. Some products with unsaturated fats form more harmful substances when heated to higher temperatures,” it said in a statement.

“Similarly, the effect will be more additives, which does not necessarily increase the health and quality of products.”

Will the tax alter eating habits?

Other industry sources are sceptical about whether the tax will even affect consumer behaviour, despite the Chamber of Commerce predicting food inflation of 0.2-0.3% by H2 of 2011, as a direct result of the tax.

A spokesman for Danish Agriculture & Food Council, which represents the nation's food industry and farmers, told FoodNavigator.com: “One thing that concerns us is fat levels in pork. Some slices of pork have a lot more fat than others, but under the current proposal all pork is sorted equally, which we think endangers public health.

"Overall the question is how you encourage healthy eating - since this is what the government is setting out to do - and we don’t think the law will have any real effect on consumers’ eating habits.”

The country’s tax ministry has calculated that butter prices will rise by 14% under the new tax regime, with margarine up 21% and whipped cream 12%.

And using festive favourites as benchmarks, the Chamber of Commerce predicts that the least expensive duck will be 13.6 per cent more expensive this Christmas, while prices for the most expensive birds (with less fat) would only rise by 4.7%, thus penalising less affluent consumers.

Governments should explore 'all policy levers'

Jane Landon, deputy chief executive of the National Heart Forum said the Danish levy was an interesting development: “With the current crisis of obesity and diet-related ill-health such as cardiovascular disease, governments should explore all policy levers available to them to encourage healthy eating."

"The impact of the Danish saturated fat tax should be carefully monitored across all income groups to see if and how consumers respond to the price signal. Denmark has led Europe by introducing a ban on artificial trans fats. It will be interesting to see if this new tax could help to discourage food companies from substituting saturated fats where they have replaced trans fats.”

A spokeswoman for the UK British Heart Foundation (BHF) declined to comment on whether it would support such a tax in the UK, but said one concern was that lower-income consumers (who traditionally buy foodstuffs with higher saturated fat levels) could be penalised by a tax of this kind.

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