Food and Drink Obesity Tax: Curbing the Problem
Europe has an increasing obesity problem and this has prompted some governments to explore opportunities to tax specific food and drink products in order to curb the problem. UNESDA explores what needs to be done.
There has been a lot of talk about food and drink taxes in recent months. But is taxation the correct way to address obesity? Will the introduction of so-called 'fat taxes' solve the problem and make people thinner?
Well actually, no, it will not. Obesity is a multi-factorial problem caused by an excess intake of calories often combined with a lack of exercise and sedentary lifestyles. Calories come from everything we eat and drink and in order to maintain a healthy weight we need to balance our calories in and calories out and to eat a varied diet combined with a healthy and active lifestyle. Taxing food and drink will not teach people to do this.
Tax is ineffective: addressing the obesity issues
Food and drink taxes are discriminatory. They do not address obesity or support public health goals and they impact everyone, regardless of whether they have a weight problem or not.
Food and drink taxes are also regressive. They place the greatest pressure on hard-working families and the least well-off who spend a greater proportion of their income on food and drink. Recent food price inflation has already raised prices and food taxes will merely hit people even harder.
The impact of food taxes is unpredictable. It can result in people simply substituting the tax product for other food and drink categories that contain similar or even higher calories but that are not taxed. Evidently this negates any positive health impact.
Taxing food and drink also destroys jobs and economic value as people shop cross-border to avoid the tax. That is why Denmark has abolished its taxes on fat and soft drinks because they failed to provide any measurable health benefit but resulted in severe economic damage. Governments need to be open as to why they are taxing food and drink. If they need to plug a budget deficit that is one thing, but they will not make people healthy by taxing their food and drink.
Education not tax: informing the public
If governments want to improve the health of populations, they should teach people how to eat a healthy diet and lead balanced lifestyles, not tax them.
There is a clear and important distinction to be made between products whose consumption is always harmful and those whose societal impacts depend on the quantity and frequency of consumption. Health-related externalities tied to food and non-alcoholic beverages only arise when large segments of the population consume the products in ways that are unhealthy. Simply eating a cookie or drinking a fruit drink does not generate a negative impact to society.
There are many instruments which are more effective than tax in achieving health policy objectives. For example the allocation of resources to deliver optimal nutrition education amongst all categories of society. Education is key to ensuring that citizens are aware of how to feed themselves and their families. Successfully tackling the root causes of obesity requires a coordinated, multi-stakeholder approach among governments, industry, health authorities, schools and civil society to promote better health and change attitudes and behaviour.
Consumption and obesity: what about soft drinks?
There is no correlation between soft drinks consumption and obesity levels. For example, children's consumption of soft drinks in the Netherlands is five times higher than in Greece, yet obesity and overweight rates are three times lower.
The soft drinks industry supports moderation and balanced diets. It offers a wide variety and choice of drinks including reduced and zero calorie options to help people manage their calorie intake. These no- and low-sugar varieties now account for 30% of total soft drinks sales in some European markets.
The industry believes that empowering consumers through information, education and choice is the key game-changer in addressing obesity. Giving people the tools to be managers of their own health is a critical step in tackle the obesity pandemic for the long haul.