Should New Zealand have a fat tax?

By Amanda Johnson 04/10/2011 8


This week it was reported in the media that Denmark has become the first country in the world to introduce a fat tax on food, with a surcharge on foods high in saturated fat of 16 kroner ($NZ3.80) per kg of saturated fats in a product.

According to Radio New Zealand, Health Minister Tony Ryall has ruled out a fat tax for New Zealand, saying that a fat tax would add to the burden on many families in tight economic times.

We are in the grips of an obesity epidemic here in New Zealand, and last month the new National Diet and Nutrition survey showed that the prevalence of obesity among men had jumped from 17 percent in 1997 to 27.7 percent in 2008-2009 and from 20.6 percent in women to 27.8 percent. Among Maori, 40.7 percent of men were obese, and 48.1 percent of women. But is a fat tax really the answer to our burgeoning obesity problem?

The debate about fat tax is not new and this latest move by Denmark has sparked media headlines around the world — with the LA Times suggesting that the ‘food police’ have stormed Denmark and the UK’s Independent newspaper suggesting that consumers are hoarding provisions ahead of the price rise.

Concerns about the introduction of a fat tax have been largely centred on the fact that such a tax may hit low-income families harder as they may be buying a higher proportion of the less healthy foods. It has also been argued that simply changing the pricing of foods won’t change people’s eating habits. In addition, it is difficult to categorize some foods as good or bad — dairy products such as the full fat versions of milk and cheese can be high in fat but a good source of calcium, protein and other important nutrients. Such foods can make an important nutritional contribution to the diets of young children or frail and malnourished older people who may need the extra nutrients provided by such products. If a tax was introduced it would have to be carefully implemented.

Here in New Zealand, the Fight the Obesity Epidemic (FOE) organisation published a report on fat tax, Cutting the Fat: How a fat tax can help fight obesity in August, 2004. In the report they outline the benefits of such a scheme, highlighting four key benefits of introducing a fat tax. Firstly, a fat tax would provide funds for prevention and medical treatment of obesity; secondly, a fat tax may deter the purchase of unhealthy products; thirdly, there would be strong incentives to manufacturers to alter product composition; and finally, a tax would provide revenue that could be used to fund complementary measures (such as a major public awareness campaign) to encourage consumers to have a more balanced diet.

However, FOE also state that ’possible introduction of a fat tax is a potentially controversial topic should not inhibit discussion of this or any other measures that may facilitate the lifestyle changes necessary to stem the tide of the obesity epidemic.’

With obesity rates sky-rocketing in New Zealand, and given that obesity is associated with many diseases and with premature death, all aspects of addressing this problem need to be considered. Price certainly has an influence on food choice, and presenting healthier food options in a way that is more appetizing and appealing, as well as more affordable than the less healthy options, is likely to their encourage selection.


8 Responses to “Should New Zealand have a fat tax?”

  • I always find the obesity tax argument a little disingenuous. If they issue is actually encouraging healthy eating then surely the better method isn’t to pull the price of food further out of low earners hands and thus the focus should be on subsidised healthy food rather than taxing unhealthy, which it always is.

    Also as someone who enjoys unhealthy food, but is apparently able to enjoy it in moderation, and not an extremely high earner I get annoyed when people are proposing taxing things I enjoy just because they are trying to force people to make the decisions they want them to make. As such I propose a solution: A varied tax in which how heavily a food is taxed for a person can be adjusted based on their BMI or something equivalent. That way it leaves me well out of it. 🙂

  • It’s an interesting debate. Certainly the SHOP study here in New Zealand found beneficial effect in terms of discounting healthy food – with price discounts promoting an increased consumption. Check out the SMC briefing on this that took place last year. (http://www.sciencemediacentre.co.nz/2010/07/09/should-we-scrap-gst-on-healthy-food/).

    As to your other suggestion – somehow I can’t quite imagine the supermarkets weighing people at the checkout and charging them accordingly!

  • It certainly isn’t new… what I’d like to see is evidence that a fat-tax may change health outcomes.
    Amanda – here are my thoughts on the trial you mention:
    Ni Mhurchu et al. Effects of price discounts and tailored nutrition education on supermarket purchases: a randomized controlled trial. American Journal of Clinical Nutrition (2010) vol. 91 (3) pp. 736-747)

    The study conclusions:
    Price discounts (12.5%) on healthier foods made no difference to the amount of saturated fat purchased. [this was the study Primary outcome]
    Price discounts on healthier foods made no difference to nutrients purchased.
    Price discounts on healthier foods resulted in small increase in purchase of healthier foods. This effect was still present (though halved) 6 months after the trial.

    “Healthier” foods were defined as those in the list of 3000 top-selling products that has the Heart Foundations Tick (1032, or 35% of the products). [my opinion is that this is probably the best they could do for the trial, but it has flaws. Have a look in the supermarket – eating too much of some of these products is probably not healthy at all].

    My opinion: It is a small, reasonably constructed trial – the first of its kind.

    Interpretation of conclusions:

    Proponents of GST removal on “healthier” foods have picked up on the secondary conclusion that there was an ~11% increase in purchase of “healthier” foods. What the study did not show (or attempt to show) was that people were healthier because of this. Given they purchased the same amount of saturated fat (and more food overall) there is certainly no guarantee that people become healthier. In fact, it is possible that their total calorie intake is higher and so they gain weight.

  • I agree – this is a complex area and there is certainly no single solution to the obesity problem. I think the SHOP study was an interesting piece of research, but we certainly need more scientific evidence to show the effects of pricing strategies (which may be subtle and difficult to measure) on not only changes in purchasing decisions, but also the effect on nutrient intakes and subsequent health outcomes.

  • Should NZ have a fat tax. No, no and hell no. The only benefit from a fat tax is more income to the government. This money would never be passed on for obesity or medical programs – that is a poor assumption.
    Raising costs for food do not ultimately create the desired food intake. Behaviour change is not driven solely by expenditure. People buy food based upon multiple factors, the price is not always the limiting factor. Just look at the range of high priced, high energy ‘indulgent’ products available.

    Never mind the demonizing of food, developed from a poor quality evidence base. Its bad enough public health policies have spent years performing uncontrolled trials on the population (salt, fat etc), but to allow taxing based upon this poor quality evidence? No.

    But then to combine it with the recommendations of happyevilslosh and linking it to the poor quality measurement that is known as BMI. Should RIchie McCaw be taxed because he wants to consume a high energy product while sitting at >30BMI? Maybe Dan Carter is ok becuase his BMI falls into the overweight range. The fatty. He should be taxed for eating pies.

  • My immediate response is, always, prohibition isn’t the answer, education is and it’s a long, slow and hard road. Health authorities are working very hard in particularly at-risk population areas to teach good nutrition/budgeting etc, all very idealist perhaps, but it can work over time. We can’t ban eating, as we have largely done with smoking, it’s a different animal. We have to eat.
    Another point: re: .. with the imposition of a fat tax “there would be strong incentives to manufacturers to alter product composition”. Let’s get real here, manufacturers are already responding to market forces and reducing fat content in products, ingredient manufacturers are merrily developing products (Google Litesse) designed to replace fat without losing mouth feel.
    Finally: focusing on one component of a diet won’t work, why not a soft-drink or sugar tax, or perhaps a trans-fat tax? Enormous tax takes are generated from alcoholic products, has that caused a drop in sales. I don’t think so!
    Education is the key, a slow but sure process.

  • I think the idea that the tax will pay for the extra costs for the poor, of give more money to the government is silly. The whole idea is that people will buy less, so they won’t be paying the tax anyway…

  • Yes, interesting to consider whether a fat tax would actually change behaviour! And the debate between John Key and Phil Goff tonight was interesting in relation to GST on fruits and vegatables! I’d certainly like to see GST removed from these foods.