EC study finds Impact of food taxes on public health inconclusive and contradictory

The European Commission study into the impact of food taxes on consumption and competitiveness in the agri-food sector was published on 16 July. It aims to support policy making by gathering information on the impacts and effectiveness of food tax measures.

It concludes that when looking at whether “changes in consumption resulting from a food tax actually lead to public health improvements […] evidence from academic literature is inconclusive and sometimes contradictory” (page 13).

The study finds hard evidence from a number of Member States on the negative impact food taxes can have on competitiveness and jobs, leading to an increase in administrative burdens, notably if the tax is levied on ingredients or if the tax base is highly differentiated and complicated.

The study concludes that food taxes in general achieve a reduction in the consumption of the taxed products but that product substitution takes place in particular to:

– “Similar non-taxed or less heavily taxed items”.
– “Cheaper brands of the taxed products, thus potentially not lowering their consumption of the ingredient the tax aims to target (i.e. salt, sugar or fat)”.
– “Other products with similar levels of sugar, salt or fat to those that are taxed”.

The full study can be found here.

Education not tax, Government revenue, Industry, Taxes unfair, What others say: government, Europe