(BRUSSELS) — Having you pay 14 cents more for your burger to help you lose weight was perhaps not such a good idea after all. This is apparently what the Danish government concluded when it decided last week to scrap what is believed to be the world’s first fat tax, imposed just over one year ago. Plans to introduce a tax on sugar next year have also been abandoned.
The so-called fat tax added 16 kroner ($2.70) per kilogram of saturated fats in a product, and it was also levied on everything containing more than 2.3 percent saturated fats — from raw ingredients like butter, milk, cream, cheese, cooking oil and meat to prepared foods like pizzas. The tax meant, for example, that a 250 gram pack of butter would cost 37 cents more.
The surcharge was introduced in October 2011, in an attempt to curb the population’s intake of fatty foods and to address Denmark’s rising obesity rates. According to the Danish National Health and Medicines Authority, 47 percent of Danes are overweight and 13 percent are obese. The Danish government planned the fat tax as part of a goal to increase the average life expectancy of Danes, currently below the OECD average at 79 years. “Higher fees on sugar, fat and tobacco is an important step on the way toward a higher average life expectancy in Denmark,” health minister Jakob Axel Nielsen said when he first introduced the idea, “because saturated fats can cause cardiovascular disease and cancer.”
At a time when other countries are attempting to steer consumers to healthier choices with their own counter-obesity policies, Denmark’s fat tax has garnered significant international attention.
The United States is among those who have been following the move closely. In America, according to the U.S. Center for Disease Control, more than two-thirds of the population is considered overweight and 34 percent are obese. New York has been leading the charge in the fight against unhealthy foods by prohibiting artificial transfats in restaurant foods and imposing calorie labeling on restaurant menus; more recently, it adopted a controversial ban on oversize sodas in restaurants.
Other countries might follow suite: Senators in France last week called for a tax on foods containing palm oil, believed to be detrimental to the environment in addition to fueling obesity. The United Kingdom and Hungary are weighing whether to introduce fat taxes as part of a solution to obesity problems; and Israel is contemplating a junk food tax. The worry now is that other governments may see Denmark’s short-lived experiment as a failure and a warning not to investigate similar options themselves.
Why didn’t it work?
The Danish fat tax had come under increasing criticism by food producers as well as those in the opposition for making Danish products more expensive than imports. The government also said that because the tax pushed up the prices of dairy products, meat and processed foods, some Danes had begun crossing the border into Germany and Sweden to stock up on cheaper food. Consequently, the authorities say, the tax has had an adverse effect on the economy and put Danish jobs at risk. Another problem was the increased administrative burden on the food producers who were responsible for calculating the fat content of foods and collecting the levy.
It does not appear that a formal evaluation of the impact of the tax has been conducted. A study of the effects of the tax by researchers at the Copenhagen University found that during the first three months of the levy, Danes did purchase fewer fatty products, although there was speculation that this could have been due to hoarding in the run-up to the legislation as well as by the cross-border shopping. Hence it is difficult to comment on what impact the tax actually had on consumer behavior and to see how effective it might have been.
The reason why the tax has been scrapped is thus clearly not because it was unsuccessful at its goal of making people slimmer and healthier but for economic and political reasons. The move actually came as part of negotiations on Denmark’s 2013 budget. The controversial surcharge on the fat content of foods and a planned similar surcharge on sugar were the key negotiating points with the main opposition party, Venstre. The party has long argued that Danish businesses are losing out as consumers choose to do their shopping abroad. In other words, the tax was cancelled because of the costs it entailed for the Danish industry and without a proper evaluation of its impact, raising questions about the Danish government’s real concerns.
This leaves us with the issue of the considerable influence of corporate power on public decision-making. As the rates of obesity, diabetes, heart disease and cancer continue to grow worldwide, the public health implications of business decision-making needs to be thoroughly investigated. Shouldn’t the real question be: Why are foods that are sometimes clearly detrimental to health still allowed on the market?
On the other hand, to what extent is it possible to influence people’s behavior by slapping additional duties on products? A British medical study found that fat taxes would have to increase the price of unhealthy food by as much as 20 percent in order to cut consumption by enough to reduce obesity, and even then there is a possibility that consumers swap out one unhealthy habit for another.
Is it really up to the state to punish people each time they indulge in fat-consumption habits? Shouldn’t people take responsibility for own their choices? If people persist in consuming products that damage their health, this means there is something wrong not so much with their behavior but most of all with the way they think. Hence, education rather than taxation would probably be a better way of encouraging people to eat healthy foods.
Possible variations of the tax
Another question is, why target fat only? At the time the tax was introduced in Denmark, some nutrition experts questioned the type of food that was targeted, saying fat was the wrong attack and that salt, sugar and refined carbohydrates can be more harmful to health and should be tackled instead.
The idea was to hit things like potato crisps and hot dogs, but because it was implemented across the board, it ended up being applied to nearly all types of food, including basics like milk and cheese whereas it probably would have been better to target particularly unhealthy processed food. Another problem was how the tax was applied to meat. It was imposed per carcass not per cut, which meant higher prices for lean sirloin steak as well as for fatty burgers.
Some critics argue that fax taxes typically affect mainly the poor because eating healthy food costs a lot more. Low income minority populations tend to experience obesity at a higher rate and are more likely to be overweight because they have little access to healthy food. Hence it is unfair, they argue, to raise prices in order to discourage overweight people from eating junk food and have them eat vegetables and fruits instead since low-income people cannot usually afford to buy that kind of food.
This has to be nuanced though: Obesity, diabetes and heart diseases are mostly a problem in developed industrialized nations not in poor developing countries. Hence limited income does not necessarily lead to unhealthy food. On the other hand, research has shown that when poor people have more income, they do not necessarily switch to healthier food, because this is not their priority. What they want is what they consider as tastier food, often associated with fat and sugar.
Eating eggs, vegetables and wholegrain bread is not more expensive than eating pizzas, hamburgers and white bread; the real issue here is that given the choice, most people would probably go for the second. Which brings us back to education: Eating healthy is not just a behavior, it is a way of life.