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Denmark Eliminates 'Fat Tax' While California Cities Defeat 'Soda Tax'

Nov 14, 2012

Laws that mandate taxes on so-called "unhealthy” foods have not been faring well recently. Although these laws are intended to provide revenue for governments and improve public health, the negative effects on business, and consumer taste buds, have made them unpopular with the voting public.

In Denmark, a law implemented just last year to tax food products containing more than 2.3 percent saturated fat has received widespread criticism throughout the country. Danish lawmakers announced this week that they have decided to end the tax on January 1, 2013, citing the negative effect on small businesses and public disapproval. The tax, which reaches as high as 9 percent for some products, affects a wide variety of popular foods, including butter, cheese and cream.

In addition to raising revenue, the fat tax aimed to address public health concerns over rising rates of obesity and encourage a change in Danish diets. Although there is some evidence that the law did affect buying habits, consumers didn't necessarily switch to lower-fat products. Many Danes switched instead to lower-cost alternatives, and others crossed borders into Germany or other countries with lower food taxes to purchase their favorite products.

Danish lawmakers also decided against creating a similar “sugar tax” that would hike the cost of products with higher levels of sugar.

Californians Reject 'Soda Tax'

Some consumers in the United States are equally opposed to government use of taxes to steer them away from certain foods. Voters in two California cities, for example, last week defeated ballot initiatives that would have imposed taxes on sugar-sweetened beverages. While these types of taxes are nicknamed “soda taxes,” the initiatives would have applied to all non-alcoholic beverages with caloric sweeteners, including flavored milk, milk drinks and drinkable yogurt.

IDFA opposes taxing foods and beverages to influence purchase decisions.

"These taxes would be nothing but a regressive tax on those with the least resources," said Connie Tipton, president and CEO of IDFA. "If we go down this road, what foods are next? We don't think government should dictate food and beverage choices through taxation."

For more information, contact Michelle Matto, IDFA consultant on nutrition and labeling, at amfoodnutrition@gmail.com.

 
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