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French MP threatens tax hike on sweetened soft drinks

By Guy Montague-Jones , 12-Jul-2011

A politician from the ruling UMP party in France has put forward a proposal to more than triple value added tax (VAT) on sweetened soft drinks.

Bernard Reynes, MP for the Bouches-du-Rhone region, recommended an increase in VAT on soft drinks from 5.5 per cent to 19.6 per cent in a report to the French government on agricultural competitiveness. Reynes said the measure would help fund social security payments to farmers.

But the soft drinks industry claims the move would be unjust and damaging to an important sector of the French economy.

It has been labelled as “unjust and unjustified” by the French soft drink trade body, Le Syndicat National des Boissons Rafraichissantes (SNBR).

SNBR said such a tax increase would increase the price of soft drinks and weaken household buying power, especially those with modest earnings.

In addition, the trade body claimed the move would hit an industry that employs around 5,000 people in France.

The Union of European Soft Drinks Association (UNESDA) has come out in support of the French trade association. It has argued that the French proposal goes against the government aim to increase consumer buying power and threatens an important sector of the economy.

The French proposal to increase taxes on soft drinks comes as pressure rises in the rest of Europe to tackle obesity and ill-health through taxation on fatty and sugary foods. Denmark has introduced such a fat tax and Romania is in the process of doing the same in an effort to reduce national rates of obesity.