The fat tax debate is reignited again

By Amanda Johnson 12/12/2012 1


The debate about fat tax has been reignited with the publication of a new paper today (12 December 2012) by New Zealand researchers. Taxes on soft drinks and foods high in saturated fats, and subsidies for fruit and vegetables, could lead to beneficial dietary changes and potentially improve health, say the authors of this latest research.

Helen Eyles and her colleagues from the University of Auckland and the University of Otago (Wellington) reviewed all relevant modelling studies that investigated the association between food pricing strategies, food consumption and chronic diseases. In their combined analysis of 32 studies, the authors’ model predicted a 0.02% fall in energy intake from saturated fat for each 1% price increase. Also, a 10% increase in the price of soft drinks could decrease consumption by 1% to as much as 24%.

In contrast, the authors found that a 10% decrease in the price of fruits and vegetables could increase consumption by between 2% to 8%. The results also indicated better health outcomes for those on lower incomes, suggesting that food pricing strategies have the potential to reduce inequalities in health.

The authors do note that the majority of included studies (25/32) were of low quality, with substantial variability in model structures, data inputs, and the types and magnitudes of food taxes and subsidies assessed. There is also evidence, for ‘compensatory purchasing’; for example, if carbonated drinks are taxed, then there are non-carbonated but equally ‘sweet’ drinks available to choose from.

We are in the grips of an obesity epidemic here inNew Zealand, with one in three adults now overweight and a further one in four obese. It is generally agreed that multiple strategies are needed to address the problem; but should a tax on fatty and sugary foods be implemented here in New Zealand?

Denmark last month scrapped its fat tax, which was implemented a year ago across-the-board on all foods with a saturated fat content above 2.3 percent. The hope was that consumption of unhealthy foods would be reduced. According to media reports, Danes simply began to do their grocery shopping internationally, heading to countries that didn’t levy a tax on fat. Although it has been suggested in a New Scientist article that the real reason for the repeal was to appease business interests.

Arguments in favour of a tax on unhealthy foods include the fact that a tax would provide funds to help towards the prevention of obesity (for example advertising campaigns to promote dietary improvements) and would also help fund future medical costs. It might also deter consumers from purchasing unhealthy foods and might encourage food manufacturers to alter the composition of their products to make them healthier. The results of this latest research would appear to support the introduction of a tax.

The authors of the research study suggest that “Based on modelling studies, taxes on carbonated drinks and saturated fat and subsidies on fruits and vegetables are associated with beneficial dietary change, with the potential for improved health.”

With obesity rates sky-rocketing in New Zealand, and given that obesity is associated with many diseases (including type 2 diabetes and cardiovascular disease) 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 encourage their selection.

For more information about the research, which is freely available, follow this link to PLOS Medicine.


One Response to “The fat tax debate is reignited again”

  • > The authors of the research study suggest that “Based on modelling studies, taxes on carbonated drinks and saturated fat and subsidies on fruits and vegetables are associated with beneficial dietary change, with the potential for improved health.”
    That’s lovely stuff. Unfortunately when a fat tax was tried out on real people in Denmark, it was a failure. Mathematical or economic models are no substitute for actual people.