Breaking News on Food & Beverage Development - Europe

Scrapping ‘fat tax’ on Denmark budget agenda

By Rod Addy, 30-Aug-2012

Related topics: Carbohydrates and fibres (sugar, starches), Fats & oils, Legislation, Sugar, salt and fat reduction

The idea of scrapping tax on sugary and fatty food and drink has been incorporated into budget proposals by the Danish government.

The move follows news on FoodNavigator that it was considering the issue last month. The country introduced a levy on saturated fat in food in October last year and had planned to introduce a similar tax for products high in sugar from January 2013.

Independent dietitian Gaynor Bussell, who has worked extensively with the food industry on nutritional issues, told FoodNavigator she believed the decision was wise as there were better ways to encourage healthy eating.

“I always felt at best it [‘fat tax’] would not be effective and at worse make things worse. Foods that are highly desirable can go up in price, but people will still buy them when they are much more expensive and it's really hard to tell at what price they will stop buying them.

“Trouble with this is that they may decide to buy even less of the healthy stuff in order to have enough money for the food they like. Maybe reducing the price of healthy food would work better?”

Blunt instrument

Nutritionist Dr Carrie Ruxton said: “I’ve never been in favour of fat or sugar taxes as these blunt instruments of behaviour change can inadvertently target the wrong foods. For example, pure fruit juices and smoothies come out as ‘high’ for sugar, while salmon get ‘high’ scores for fat and saturated fat.

“Both butter and low fat margarines would end up being taxed as, by their nature, they are still ‘high’ fat foods relative to guidelines. Also, elderly people and children need higher fat diets than overweight adults and would end up paying more for their foods.”

Reducing price of healthy food

A spokeswoman for the Danish Consumer Council said it did not comment on fiscal matters. Trade union HK Commerce, which together with the Danish Food & Allied Workers Union (NNF), had campaigned for both taxes to be dropped, had not yet issued a comment as FoodNavigator was being published.

These unions, and other groups in Denmark, claim the sat fat tax is driving Danish consumers over the border to buy fatty products more cheaply in Germany, Holland or Sweden. This is threatening retail and manufacturing jobs, they say.

“The Danish Agriculture and Food Council says it expects the fat tax to cost Denmark 1,300 jobs in the next three years,” said an NNF spokesman.

Tabling the proposal to scrap the fat tax, which was set at 16 Danish Krone (€2.15)/kg, still needs careful thinking as the government needs to come up with alternative ways of raising cash. Hence the direction is at the proposal stage and still requires ratification.

However, the Danish government is expected to agree to the move and is understood to be formulating plans to recoup the money by increasing income tax.

Israel is also understood to be considering introducing a 'fat tax' .