Increasing tax is backwards thinking. Just ask the Danes.
1st October 2011 saw a first for Danish consumers; they were being slapped with a fat tax. Foods containing over 2.3% saturated fat were now going to cost more.
With Danish obesity rates rising to 13.4% in 2010 MPs were confident that the new levy would reduce consumption of products with high levels of saturated fat.
By 2013, the fat tax was abolished – a short 15 months after its introduction. Despite optimistic assertions from Danish MPs the fat tax had little to no impact.
Many Danes either shopped in neighbouring countries to avoid the tax, continued purchasing despite additional costs (earning the Danish Government an extra €216million in revenue) or switched to cheaper brands. Overall, there was a reduction of just 0.9% in the purchase of products high in saturated fat.
Is the UK about to follow the same route?
Like Denmark, the UK Government is introducing a new levy in a plan to reduce excessive sugar consumption. In 2018, the ‘sugar tax’ will see sugar-sweetened drinks with more than 5g and 8g of sugar per 100ml taxed an additional 18p and 24p per litre, respectively.
As the Danish fat tax proved, punitive levies affect the least affluent the most, and crucially do not effectively reduce consumption.
We think that this is looking at the problem of excessive sugar consumption from the wrong angle.
At #DontTaxHealthy, we recognise that people like consuming their sweet treats. And why not. Eating clean all of the time is boring. We need to work with people’s diets and not against them.
Healthier alternatives are gradually becoming more widely available, but they’re more expensive. This is because healthier ingredients are more expensive (stevia costs approximately 22 times as much as sugar) and usually, innovation comes from smaller suppliers who cannot compete with the economies of scale of large corporations.
Cutting the VAT from the standard-rate of 20% to the reduced rate of 5% on food and drink products with lower sugar will move healthier alternatives - across multiple categories - into price-parity with their unhealthier competitors.
Spend less. Eat better.