Helir-Valdor Seeder, Minister of Agriculture is of the opinion that Estonian society is not ready to support a separate tax on excessively salty, sweet or fatty food products.
People’s awareness should be raised instead, as the latest survey on energy drinks published by Eesti Paevaleht indicates that incorrect conceptions of such drinks are spreading, especially among young people.
Seeder has previously presented the idea of imposing an extra tax on products that contain excessive amounts of sugar or salt in the media, but he now acknowledges that quite a few countries that have tested the tax – including Finland and Denmark – have since revoked it.
“There are quite a few countries that have acted inconsistently in terms of additional taxation, which shows that such taxes aren’t clearly justified and that proper solutions haven’t been found” Seeder said. He clarifies that earnings are insufficient and that the tax would change the prices of all products.
The minister says that promoting healthy dietary habits and exercise as a lifestyle should be the main government focus instead.
Please see the Ohtuleht website for more information
According to the Health Minister Laurette Onkelinx, there is no evidence that taxation has any impact on the consumption of soft drinks. For several months Health Minister Laurette Onkelinx has studied the possibilities of imposing a soda tax in Belgium. With the proceeds of the tax, Onkelix was planning to finance health campaigns targeted at improving people’s diets.
However, after consultation with the food industry Onkelinx has decided that the soda tax is not forthcoming. “We prefer a different approach, which we encourage producers to use less sugar. Because it is proven that a soda tax is not effective, “said Katleen Sottiaux, the spokeswoman Onkelinx in the Flemish newspaper De Tijd.
For more information please see here.
What happens if half of the population of a small city faced a 10% tax on soft drinks, whilst the other half didn’t?
Well, according to the results of a six-month field investigation carried out by researchers at Cornell University (Wansink et al.) there was no major change in consumption behaviour – although some interesting unintended consequences of the tax did come to light.
The 10% tax did result in an initial short-term decrease in soft drink purchases – in the first month. But there was no decrease in purchases over a 3-month or 6-month period. What is more interesting however, is that in beer-purchasing households, the tax led to increased purchases of beer.
The research found that there are no significant differences in volumes of sugar-sweetened soft drinks or fruit juices between households paying the additional 10% tax and those not. There was also no significant change in calories purchased between frequent and infrequent buyers taking into consideration any substitutions consumers made, including beer-purchasing households who purchased more beer.
The study illustrates how responses in demand to taxes on foods are not well understood, citing other research pointing to the need for tax limits to be significantly higher to have any impact, and research that suggest that substitutions and compensation occurs that moderates any impact.
Overall, Wansink et al. conclude that “taxes on energy-dense foods may not be as effective an anti-obesity strategy as some have projected.”
You can download the paper and find out more about Wansink and the other authors by following this link.
The following is the abstract of a study produced by the National Institute of Public Health and the Environment in the Netherlands – under the remit of the Ministry of Health, Welfare and Sport. The study concludes that it is not yet possible to predict the effect of pricing policies on total food consumption, and illustrates the complexity of consumer behaviour and buying habits, when combined with aspects such as price elasticity.
As yet, it is not possible to predict the effect of pricing policies on total food consumption. Data that account for unexpected side effects are scarce. For example, lowering the price of fruits does not by definition increase fruit consumption, but may lead to an increase of sales of another, unhealthy, product. Taxing “unhealthy” products and/or providing subsidies on “healthy” products are often mentioned as ways to exert a positive influence on dietary intake.
The research described in this report is based on three investigations. Firstly, a review of the literature shows that little is known about the effectiveness of these kind of measures. Furthermore the literature showed that consumers do, indeed, consider price an important determinant in choosing which products to buy.
Secondly, results from the MARGARIN-study among a small group of residents living in the eastern part of the province of Groningen, demonstrated that other factors, e.g. tastiness, are associated with the actual amounts of fruits, vegetables and fish consumed. Thirdly, information on price elasticities of a number of foods (crisps, soft drinks, meat, fruit, vegetables) also suggested that their purchase is only moderately influenced by their own price.
Price elasticities were both drawn from the literature and calculated from data on purchases by 4,400 Dutch households. When calculating the price elasticities, cross elasticities were not accounted for. Proper data on price elasticity of products in the Netherlands are scarce. Such data are necessary, however, if reliable estimates of the health effects of pricing policies are to be made.
You can access the full report here.