When it comes to buying food, price is influential, but is a 'fat tax' the answer to curb obesity? Dr Stuart G Nicholls from Lancaster University, Assistant Professor Dr Wencke Gwozdz and Professor, Dr Lucia A Reisch from Copenhagen Business School and Dr Kristin Voigt from Lancaster University look at whether a fiscal policy would work Studies indicate a trend of increasing obesity with a higher prevalence in lower socioeconomic status groups. Implicated in this increase is the cost of food, with research suggesting that price is a decisive factor in food purchasing.1 With energy-dense foods being less expensive than healthier foods,2 low-income groups in particular may be driven towards unhealthier foods. The potential for fiscal policy options as a strategy to tackle diet-related disease is increasing with the failure of educational and informational interventions to achieve population-level changes in obesity.3,4,5 In Romania, a tax on foods such as hamburgers, chips, fizzy drinks and other fast foods with high sugar and fat levels has been proposed.6 Such a policy would be unique, including savoury as well as sweet food items. However, to date these proposals have yet to be enacted into policy. Perhaps the most advanced policy proposal is that of Denmark. As part of a wide-ranging tax reform, the Danish government plans to implement a new tax on foods by July 2011. The tax is valid for food products such as meat, dairy products, animal fats and vegetable oils if the content of saturated fat exceeds 2.3%. The tax is DKK 16 (euro2.15) per kg of saturated fat in food products, with an expected increase in food prices of up to 35%, depending on the food category. A 25% increase in taxation on ice cream, chocolate and sweets has also been proposed. The legislation, proposed in July 2010 and to be phased in by 2019, is estimated to contribute DKK 2.75 billion (euro370 million) to the overall tax reform. However, the policy has failed to progress through parliament, in large part due to strong public resistance. This has already led to a reduction in the proposed levy, from DKK 40 (euro5.40) per kg of saturated fat to 16 DKK (euro2.15). Despite this reduction, there have been further delays with the law yet to pass through parliament. Are taxes on unhealthy food a new initiative? Not really. In the UK, food bought in restaurants and take-aways, as well as all confectionery, attract a sales tax (VAT) of 20%, while other food sales do not. In France, sweets, chocolates, margarine and vegetable fat are subject to VAT of 20.6%, while other foods attract only 5.5% VAT.7 These taxes may be seen to correspond to items considered to be particularly unhealthy. The difference between the existing and proposed schemes lies in the rationale, with the most recent proposals having the explicit aim of shifting purchasing patterns away from energydense, unhealthy foods towards more nutritious alternatives. As exemplified in Denmark, concerns have been expressed over such policies and, while there is uncertainty regarding the potential impact of taxation policies, a key argument against taxation rests on the ethical principles of equity and social justice. Taxation of unhealthy foods, without subsidization of healthier options, can be seen as regressive, as lower-income groups spend a greater share of their income on food, and also because consumption of unhealthy foods is greater among less-affluent groups.8,9 Can such concerns be alleviated if taxation is combined with subsidies on healthy foods? Depending on how they are structured, tax-subsidy schemes can, in principle, allow for higher prices of unhealthy foods to be offset by lower prices on healthy foods. Thus, low-income groups can keep their food budgets constant if foodpurchasing behaviour is changed. This would go some way towards alleviating concerns about regressivity. In addition to impacts in terms of relative costs, we must consider whether tax-subsidy schemes might have differential effects in terms of health outcomes. …
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