EUROPE: ‘Fat Tax’ May Hurt Poor

By Pavol Stracansky Reprint | | Print |

Pavol Stracansky

BUDAPEST, Aug 7 2011 (IPS) - The introduction of some of Europe’s most far-reaching taxes on unhealthy foods has sparked renewed debate about the effect of such levies on poor people.

The taxes, which were passed by the Hungarian parliament in July and will take effect on Sep. 1, apply to a range of foods with high salt and sugar levels, including chocolates, ice creams, energy drinks, biscuits and crisps.

Supporters have hailed the levies as the most far-reaching of their kind in Europe and say they will help improve diets.

The government says the tax will raise 74 million euros a year and plans to use the money to help finance healthcare.

But some doctors have warned that such taxes will not only be ineffective in reducing obesity and promoting healthy eating but will disproportionately affect the poor.

Dr Eduard Adamescu, a specialist in diabetes and metabolic and nutritional diseases in neighbouring Romania, points out that even broader taxes on unhealthy foods proposed last year in his country failed to get through parliament.

The draft legislation, which would have been the most extensive in the world and included charges on fast food products and fats, was eventually dropped.

Ministers admitted they feared the effects on a population which spends the majority of its average wage of less than 300 euros a month on food, and that already bad diets among poor people would become even worse.

Dr Adamescu, who works at the Nicolae Malaxa Hospital in Bucharest, told IPS: “Poor people in Romania eat very fatty foods at home. If those products are taxed they will turn to even cheaper products and will have an even more nutritionally unbalanced diet.”

Food industry leaders have said the same. Romania’s Food Industry Federation head Dragos Frumesu explained to local media: “Romanians eat junk because they are poor. A tax will not stop them, they will just choose even cheaper products.”

Studies in other countries have suggested the same. A report commissioned by French authorities when a possible levy on unhealthy foods was being considered in 2008 was prefaced by the statement that it could “most heavily” affect the poor.

In the U.S., which has one of the highest obesity rates in the world, lawmakers in a number of states have mooted so-called ‘fat taxes’.

Critics, including some doctors and nutritionists as well as groups working with the poor, have opposed the levies. They argue poor people are more likely to eat high-calorie foods laden with sugar, fat and salt because they are cheaper than healthier options such as vegetables and grains.

The World Health Organisation (WHO) says it recommends a full evaluation of any such taxes before they are implemented.

Dr Timothy Armstrong, coordinator at the WHO’s department for Health Promotion, told IPS: “The majority of studies on taxes have found them to be regressive from an equity perspective.

“We recommend fiscal policies promoting health are considered by countries but that an assessment is carried out of the risk of any unintentional effects of such policies on vulnerable populations.”

In Hungary, though, doctors reject concerns over the effect of the new tax on the poor.

Dr Andras Nagy, president of the board of the Hungarian National Heart Foundation, told IPS that the Hungarian tax would not increase poverty among the poor. He said the products which fell under the new tax were not dietary essentials. “These are the kind of foods, convenience foods, which people do not need and can do without.”

The passage of the laws comes amid a global obesity epidemic. According to latest figures from the Organisation for Economic Co-operation and Development (OECD) roughly one in two adults in Hungary is overweight or obese.

Figures from other countries show the extent of the problem with adult obesity rates. The rate in the UK is 25 percent, in Mexico 30 percent, while in the U.S. it is 34 percent.

Ever-growing obesity and the subsequent extra health care costs associated with weight-related health conditions had already led some European states to introduce charges on specific food products before Budapest’s recent legislation.

In Finland, sugary products such as soft drinks, ice cream and chocolate, are subject to a tax. Helsinki is also now considering a levy on saturated fat. Sugar and chocolate is also taxed in Norway while Denmark has plans to introduce a tax on saturated fats later this year.

Some doctors say though that taxes, regardless of what effect they may have on the poor, will not help reduce obesity rates.

Dr Lygia Alexandrescu, a nutritionist at a private health clinic in Bucharest, told IPS: “What is needed is education. An investment needs to be made into educating the public about what they eat and their choice of food.

“Just making certain food unavailable will solve nothing because if someone wants to eat a particular food they will do so regardless.”