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Foto: Colourbox

Fat tax scrapped

The Danish government recently announced its intention to abandon the ‘fat tax’, which was introduced just one year ago in October 2011.

It is barely 12 months since the Danish government introduced a ‘fat tax’. The decision to scrap it appears to have been based on a number of its ‘unintended consequences’ adversely affecting economic growth and no evidence that it was producing any public health benefits.

The tax was charged on all domestically produced and imported food including meat, cheese, butter, edible oils, margarine, spreadable products and other food such as snack products. Only products with a saturated fat content at or below 2.3% were excluded. The administrative burden for raising the tax fell fairly and squarely on the food industry as it was paid by the processor or, in the case of imported foods, by the importing company.

The tax was levied at the rate of DKK16.00 (£1.75) per kg of saturated fat in the product concerned. Thus, in the case of pork, which is estimated to have a saturated fat content of 6.5g per 100g, the tax charged would be be DKK1.04 (£0.11) per kg – or just over 5p per lb.

The whole of the Danish food industry welcomed the move to abandon the tax, having made clear its opposition from the outset, on the grounds that it was merely a government revenue raising exercise rather than a considered measure to improve public health. The tax also placed a wide range of nutritionally valuable foods, such as meat and dairy products, in the same category as ‘booze and fags’. It was also a ‘regressive’ tax with a disproportionate effect on lower income groups.

In welcoming the news, the Danish Agricultural & Food Council said that the ‘fat tax’ and the planned ‘sugar tax’ cost 2,400 jobs in Danish food industry and added DKK 200m to its administrative costs.

In addition, the introduction of the tax appears to have boosted ‘cross border’ shopping by Danes. It is estimated that nearly 50% of Danes regularly engage in ‘cross border’ shopping in Germany and Sweden.

The news was greeted by dismay by the public health campaigning groups, who said the tax had not been in place long enough for its effects to be properly measured.

The Danish food and farming industry believes that targeted education and information programmes about healthy lifestyles are more likely to deliver longer term public health improvements and encourage more positive lifestyle choices.

For example, the Danish Agriculture and Food Council is a sponsor of the current ‘6 a Day’ campaign in Denmark, to encourage consumption of fruit and vegetables and other initiatives promoting a balanced and varied diet as part of a healthy lifestyle ('6 om Dagen').

The Danish government decision received significant coverage in the national and trade press...