Fat Taxes Do Not Work As Intended

July 30, 2014 International Tax Cooperation

BIRMINGHAM – Taxes on unhealthy foods may change consumer behaviors, but they may not stop people from consuming unhealthy ingredients.

On July 29th the EU trade association for food and drink industries Just Food issued a new statement claiming that recent research conducted by the European Commission shows that taxes on foods high in salt, fat and sugar do not encourage consumers to purchase healthier products.

According to the Just Food, the research conducted by the EU showed that “…non-harmonised taxes on high sugar, salt and fat products such as soft drinks, sweet and salty foodstuffs do induce a reduction of the consumption of the taxed products,” however, consumers are likely to just turn to equally unhealthy cheaper products, or to other damaging substitutes.

Just Food conceded that while targeted taxes may reduce the consumption of some products, the hikes will not lead to a reduction in the specific ingredients, as intended.

Aside from not achieving the specific goals set out for the tax, such levies may also have the further negative effects such as reduced employment levels and profits.

Photo By: Katherine Lim