SUBSCRIBE

Breaking News on Food Marketing and Retailing

Headlines > Retail

Hungary prepares for 'discriminatory' September 1 fat tax

By Shane Starling , 26-Jul-2011

Foods like this will earn the Hungarian government more coin from September 1, 2011
Foods like this will earn the Hungarian government more coin from September 1, 2011

Hungary will introduce a fat tax as of September 1 this year -a move the food industry says is unnecessary and ineffective in achieving widespread dietary shifts.

From September 1 Hungarian food manufacturers will have to pay a tax of 10 forint (€0.37) for foods bearing fat, sugar and salt at levels over a certain threshold, something backed by some consumer groups concerned about eating habits that promote the rise of obesity and type 2 diabetes.

The Hungarian government says the tax will raise €70m per year – money which it says will offset public health costs of treating the consequences of high-fat,sugar and salt diets.

While Hungary’s obesity problem is not as big as in countries like the US where the percentage of obese adults exceeds 30%, it sits at around 20% and has been getting worse.

Discriminatory?

Fat taxes are an idea whose currency has grown in recent years as governments try to share healthcare costs, but the issue is complex as it becomes a moral battle about personal versus industry culpability for dietary intakes and their consequences.

The pan-European food industry body, Food and Drink Europe, opposes fat taxes because it views them as being “discriminatory”.

The group has emphasised that such measures unfairly target particular types of food when it is overall dietary habits that are the problem (the argument that there are no bad foods par se, just bad diets).

It also states that such taxes unfairly prejudice the lower-income sections of society that typically purchase the affected foodstuffs in the greatest numbers.

Other critics of the taxes point to examples like Denmark where obesity rates have risen, like most other developed world nations, despite in its case implementing a tax of high-sugar confectionery in the 1920s.

Denmark fat tax

Denmark introduced a saturated fat tax at the start of the year with the country’s tax ministry calculating that butter prices will rise by 14% under the new tax regime, with margarine up 21% and whipped cream 12%.

The Danish Chamber of Commerce opposed the proposal because of its potential damage to productivity and imports, and the Chamber says the tax could even promote food with more harmful additives as an unwanted consequence.

“The shift from saturated to unsaturated fats may be expected, but it is not necessarily desirable from a health perspective. Some products with unsaturated fats form more harmful substances when heated to higher temperatures,” it said in a statement.

“Similarly, the effect will be more additives, which does not necessarily increase the health and quality of products.”

Subscribe to our FREE newsletter

Get FREE access to authoritative breaking news, videos, podcasts, webinars and white papers. SUBSCRIBE