AmCham: discriminatory taxation ineffective, distorts competition

This is a summary of the American Chamber of Commerce EU’s position paper entitled “Discriminatory taxation of food and beverages is ineffective and distorts competition”.

The American Chamber of Commerce to the European Union (AmCham EU) supports policies aimed at improving the health and lifestyle of Europeans and we are keen to work with the institutions to find solutions to the problem of increasing obesity rates. However, we feel that attempts by a number of Member States to introduce special taxes on certain food and beverage products are not an effective approach to tackling complex dietary and lifestyle-related issues related to obesity. Furthermore, they may even harm the competitiveness of the EU and national budgets. AmCham EU is concerned about discriminatory taxes applied to the food sector for the following reasons:

  • Food and beverage taxes generate competitive disadvantages;
  • Food taxes are regressive in nature and hit lower socio-economic groups hardest;
  • There is no evidence demonstrating a positive impact of food taxes on the ‘healthiness’ of people’s diets;
  • Punishing specific food products alone would not automatically lead to the elimination of bad diets and lifestyles; and
  • Food taxes hit companies that produce locally and could discourage investment in Europe by both European and non-European companies.

Given the discriminatory nature of taxes on specific food products, AmCham EU believes that they must prove necessary, effective and proportional. As none of the taxes introduced so far have fulfilled these conditions, we would welcome their re-evaluation.

The full position paper can be viewed online here.

Industry, discriminatory taxation, EU, Europe