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.
The UK's competition regulator has given the all-clear to Hain Celestial's bid to buy UK food and beverage group Orchard House Foods, nine months after the US group announced the deal....
Hershey made an unusual announcement today (20 September), sharing its own sales data for the last four weeks to assuage any possible investor concern over figures released by Nielsen....
As the UK starts to ponder what kind of a relationship it wants with the European Union post-Brexit, EU leaders have been lining up to warn that Britain will not be allowed to "cherry pick" deals and ...
Low food prices continue to hold back inflation rates in the UK as the supermarket price war continues in the face of rising import costs. ...
- Interview: Mondelez eyes sweet success in China
- The benefits of engaging staff in sustainability
- How food companies involve staff in sustainability
- Why Danone is withdrawing Dumex from Vietnam
- Why May's Brexit comments give reason for optimism
- 2 Sisters chief Boparan buys Bernard Matthews
- Fonterra says value-added strategy paying off
- B&G Foods acquires ABF's US spice business
- General Mills profit falls as sales disappoint
- Bernard Matthews pensions scheme under review
- The Big 15: Strategies and Priorities of Top Packaged Food Players in Comparison
- Global Chocolate Confectionery Overview: Challenges, Opportunities and Risks
- Global Foodservice Market 2016-2020
- Global Food and Drinks Closures: Performance and Opportunities
- Fast Food Restaurants in the US - Industry Market Research Report