Blog: Is a fat tax fair?
Michelle Russell | 3 June 2010
The chief executive of Sainsbury’s Justin King last week cautioned that a ‘fat tax’ might be applied to some food products by the new coalition government in the next budget, as it looks to cut mounting debt.
The issue is one that has raged on for some time, both in the UK and overseas.
The IMF has suggested that one of the most effective ways for the UK coalition government to raise cash would be to remove the zero-rate of tax on food and other items.
"There is substantial scope for improving the revenue performance of the VAT in almost all countries, including by eliminating exemptions and reduced rates,” the IMF argued.
At present, VAT is already levied on some crisps, snacks and confectionery in the UK and, while some believe that extra taxes on such products would have a beneficial impact on health problems such as obesity, many others do not.
King believes a move to increase tax would be “regressive” and “bizarre”, dismissing the idea that it would tackle the problem of childhood obesity and claiming it would hit poorer families the hardest.
The UK's Food and Drink Federation has indicated that it too is opposed to such a move.
Julian Hunt, the FDF director of communications, told just-food that, while good for grabbing headlines, there is no evidence to suggest that such ‘fat taxes’ would actually work in reality.
“Many experts feel that such a taxation policy would have no effect on obesity, would hit lower income groups hardest and would be a bureaucratic nightmare to administer,” Hunt said.
“We already pay VAT on many of the food and drink items that consumer love – so introducing further, regressive taxes on such products would result only in lighter wallets, not smaller waists.”
And it seems the UK is not alone in its distaste for the tax. A survey in the US published today showed that more than half of Americans oppose a 'fat tax' on soft drinks and fast food.
The survey by Harris Interactive found that 56% are opposed to the tax, with two in five "strongly opposed".
This may explain the US government's attempt at what could be seen as a considered but long-term solution to tackling childhood obesity.
Earlier this month, US First Lady Michelle Obama unveiled a Task Force action plan calling on food manufacturers to curb the marketing of unhealthy foods to children.
The report sets out recommendations for increasing physical activity, providing healthy foods in schools and increasing nutritional knowledge for parents.
A tax that may cost jobs and reduce consumer spending could be very unpopular indeed. Maybe the US has the right idea. Education on healthy eating certainly seems key.
Danone completed its US$12.5bn acquisition of WhiteWave Foods this week. The move will roughly double Danone's presence in North America, where WhiteWave is a top four dairy player. ...
Premier Foods plc revealed today (28 March) it has secured a deal with its pension scheme trustees that will see the UK food maker reduce its pension burden....
Hain Celestial, under the scrutiny of the investment community in recent months and facing some challenges in its domestic market, has announced another shuffling of its management pack....
FrieslandCampina, which today served up higher profits but lower sales for 2016, is ready to offload the last non-dairy business owned by the Dutch cooperative giant....
- Danone's Q1: four things to learn
- Interview: Sir Kensington's on sale to Unilever
- Column: Why snacking is the new meal
- Nestle Q1 update: four things to learn
- Interview: "Disruptive" snack brand Hippeas
- Tyson shops Sara Lee bakery, Kettle and Van's
- Nestle to cut UK confectionery jobs
- PepsiCo affirms full-year target as Q1 hits mark
- Icelandic to sell Saucy Fish Co. owner Seachill
- Tyson to buy burger-to-entree firm AdvancePierre