Showing posts with label #Fat_Tax. Show all posts

Wednesday, 5 October 2011

Fat Tax

The government in Denmark, has introduced additional taxes on foods which contain more than 2.5% saturated fat. It will add 25p on packets of butter, 8p on crisps.

This BBC news clip introduces this new fiscal measure.
The biggest price increases will be seen on fatty staple foods like butter, oils and high-fat dairy products like whipping cream and crème fraiche. But all products with more than 2.3 percent saturated fat – from staples like butter to processed foods like packaged biscuits, cakes and sweets – will soon be more expensive. The extra charge will amount to 16 kroner per kilogram of saturated fat. According to the tax ministry’s calculations, a 250g package of butter will wind up costing 14.1 percent more, while the price of a litre of olive oil will rise 7.1 percent.

It is possible that the fatty foods are demerit goods, but is the tax big enough to change the behaviour of consumers in the long term, or is there a risk of government failure, if purchases of such foods remain largely unchanged. Is this type of indirect tax regressive, hitting lower income groups hardest. In the short run this tax rise might nudge the Danish inflation rate upwards from 2.9%. Over time, it also alter the behaviour of producers, changing the mix of fats in their ranges of processed foods.

Will the measure by itself impress upon the Danes the merits of a ‘healthy’ diet, or will it also require additional state intervention by way of government advertising, or regulations to change food labelling.

“It’s very interesting. We haven’t had any practical examples before. Now we will be able to see the effects for real.” Mike Rayner, Director of Oxford University’s Health Promotion Research Group said in an interview with The Daily Telegraph.. Given that the UK has a significantly larger proportion of obese adults, pressure groups and politicians may argue that Britain could benefit from a similar tax.

Given that Denmark has a large efficient dairy industry, and obesity levels of 10% it is a ‘brave decision’. It does beg questions about the ability of governments to accurately calculate optimal socially beneficial levels of consumption.Should governments intervene in the first place? This video clip of an interview last year with one of the UK’s Health Ministers raises a number of issues about policy options for demerit goods.

If saturated fat is deemed to be a demerit good, what then about sugar?

Tuesday, 4 October 2011

UK could introduce 'fat tax', says David Cameron

The government will consider introducing a “fat tax” to tackle Britain’s growing obesity levels, the prime minister, David Cameron, has said.

Cameron said drastic action was needed to prevent health costs soaring and life expectancy falling.

Under measures introduced in Denmark recently, a surcharge is being placed on foods that contain more than 2.3% saturated fat. The levy targets high-fat products such as butter, milk, cheese, pizza, meat, oil and processed food.

Danish consumers have criticised the move, which has left many retailers complaining of excessive bureaucracy.

http://www.guardian.co.uk/politics/2011/oct/04/uk-obesity-tax-david-cameron

Sunday, 2 October 2011

'Fat tax' on food aims to curb obesity

Health Statistics > Obesity (most recent) by country

http://www.nationmaster.com/graph/hea_obe-health-obesity

World's Fattest Countries
http://www.forbes.com/2007/02/07/worlds-fattest-countries-forbeslife-cx_ls_0208worldfat.html

Denmark has become the first country in the world to impose a "fat tax" on unhealthy foods.

The move will place a surcharge on foods high in saturated fat. Butter, milk, cheese, pizza, meat, oil and processed food will all be subject to the levy.

The aim is to reduce people's intake of fatty foods. But consumers have begun hoarding provisions ahead of the price rise and some scientists have suggested that it would be better to target people's salt or sugar intake.

The Nordic country introduced the tax Saturday, of 16 kroner (£1.85) per kilogram of saturated fat in a product.

The tax was approved by large majority in a parliament in March as a move to help increase the average life expectancy of Danes.

In September, Hungary introduced a new tax popularly known as the "Hamburger Law," but that only involves higher taxes on soft drinks, pastries, salty snacks and food flavorings.

The outgoing conservative 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, by three years over the next 10 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 introduced the idea in 2009, because "saturated fats can cause cardiovascular disease and cancer."

Linnet Juul says the tax mechanism is very complex, involving tax rates on the percentage of fat used in making a product rather than the percentage that is in the end-product.

Linnet Juul's organization is pressuring lawmakers to simplify the tax, but said he is unsure what will happen when the new, centre-left government takes office. AP

http://www.independent.co.uk/news/world/europe/fat-tax-on-food-aims-to-curb-obesity-2364715.html

Other countries are watching how the new Danish tax is received before possibly considering their own version of a “fat tax”.

http://blogs.voanews.com/breaking-news/2011/10/03/denmark-becomes-first-country-to-impose-fat-tax/

Denmark Institutes First-Ever 'Fat Tax'

http://newsfeed.time.com/2011/09/30/denmark-institutes-first-ever-fat-tax/

The fat tax

SOMETIMES, Steven Levitt is too clever for his own good. After playing with obesity statistics en route to computing an optimal calorie tax, Mr Levitt opines:

But as long as we are having the conversation, if we want to blame the obese for global warming, those who engage in recreational exercise like jogging or biking for pleasure should surely be discouraged from doing so because of global warming.

Someone who jogs an hour per day burns an extra 1,000 calories daily … far more than an obese person. Such wasteful burning of calories must be discouraged if we are to save the planet.

I hereby call for the next president of the United States to pass legislation imposing a carbon tax of 10 cents per hour on all recreational burning of calories. To save the planet, we must encourage people to sit at home and burn as few calories as possible.

http://www.economist.com/blogs/freeexchange/2008/05/the_fat_tax

Denmark imposes a "fat tax"

http://www.cbsnews.com/stories/2011/10/02/501364/main20114505.shtml?tag=mncol;lst;1

(AP)

COPENHAGEN, Denmark — Denmark has imposed a "fat tax" on foods such as butter and oil as a way to curb unhealthy eating habits.

The Nordic country introduced the tax Saturday, of 16 kroner ($2.90) per kilogram (2.2 pounds) of saturated fat in a product.

Ole Linnet Juul, food director at Denmark's Confederation of Industries, said the tax will increase the price of a burger by around $0.15 and raise the price of a small package of butter by around $0.40.

The tax was approved by large majority in a parliament in March as a move to help increase the average life expectancy of Danes.