'Fat tax' gets slim support

Are Ireland on the verge of making the same mistake as Denmark? The imposition, and then subsequent u-turn on the Danish tax on saturated fat has left a gaping €170m hole in the budget, after it was clear that the tax was untenable and harming the economy. So what next for Ireland in the lead-up to the budget? Alison Healy, Food and Farming Correspondent for the Irish Times investigates…

The article reports that the Danish government scrapped its tax because of public criticism over increasing prices, administration costs and concerns that it was putting jobs at risk by encouraging people to cross the border to buy food.

Shane Dempsey, Head of Consumer Foods at Ibec’s Food and Drink Industry Ireland believes that similar things could happen in Ireland.

“Anything that threatens to raise prices and depress demand will cost jobs. And increased unemployment is not a positive contributor to reducing obesity.”

Dempsey also questions whether a more recent proposal by the Department of Health in Ireland recommends increasing excise duty by 10%, (raising prices by 20c per bottle) would have any impact, especially given the price rise would likely be absorbed by the supply chain.

It seems that consumption patterns are shifting away from sugar anyway – low- and no-calorie products have increased by 36%, with regular soft drinks falling by 19%. The sector directly employs over 3,500 people and provides more than 3,000 jobs in indirect employment.

To read the full article, follow this link.