Molinari Institute Report – Nutrition taxes: a broken tool in public health policy

Molinari Institute Report – Nutrition taxes: a broken tool in public health policy

Recent reports by French senators Yves Daudigny and Catherine Deroche and by Professor Serge Hercberg highlight the public health problems (cardiovascular disease, diabetes and cancer) linked to expanding waistlines. The Hercberg report also notes that, since France’s National Nutrition and Health Programme was launched in 2000, it has not halted rises in excess weight, diabetes or hypertension. The solutions suggested in both reports are based on three lines of analysis: (a) the social cost of excess weight; (b) irrational behaviour by consumers; and, to a lesser degree, (c) social inequalities in health. Instituting new taxes on foods targeted for lower consumption would be the main remedy. Subsidies (financed by these levies) for healthful foods would provide new incentives to encourage their consumption. Nevertheless, both reports note that poor nutrition and its consequences are a complex problem that calls for an entire set of solutions, though they mostly favour tax measures. These are not a panacea, however: their effects on changes in dietary habits are often uncertain, making it hard to pursue the stated goals.


The impact of taxes in reducing the consumption of nutritionally poor foods is uncertain.

While the goals may be laudable (though this is questionable), there is a major risk of applying additional constraints on economic activity without getting the expected public health benefits (in particular, improved results from France’s National Nutrition and Health Program) while nurturing a dynamic of government interventionism that is making French society more sclerotic.  Experts and public authorities tend to depict a black‐and‐white situation, whereas reality is far more complex. Excess weight and the pathologies it leads to are a relatively recent problem in the history of humankind. We still lack the full knowledge that could guarantee an adequate solution.

Although nutrition taxes may appear to provide a response, it is important to understand their limits, especially in terms of a rational approach to avoidance, because the economic costs of these taxes are high in the long run. We should not delude ourselves. In this time of strained public finances, an ulterior motive in the renewed interest in this type of levy is to generate more tax receipts. There are many precedents. President Franklin D. Roosevelt ended the prohibition of alcohol in the United States to boost tax revenues. Due to the Great Depression, Congress had an urgent need for financing, and the best way to get it was to institute taxes on alcohol.

It is always preferable to change the context in which individuals make decisions so that they internalise the externalities they create. In this regard, obesity imposes few or no externalities if individuals bear its costs. We must therefore make sure that incentives for reducing obe‐
sity are in place. Nutrition taxes, by imposing the theoretical frame work of caloric imbalance, would limit the emergence of new ideas that could help reduce excess weight. In the end, we need to show a degree of humility toward the social and biological process. Western society, open and based on free enterprise, dates back only to the late 18th century. It is possible that the human body, after many thousands of years of survival in penury, has not yet adjusted to the abundance generated by capitalism.


To read the full report, please follow this link




Fat taxes could hit competitiveness thanks to complex rules says EU report

Fat taxes could hit competitiveness thanks to complex rules says EU report

Taxes on foods high in sugar, salt and fat, do reduce consumption but can lead to consumers simply switching brands or finding other ways to purchase fatty foods while avoiding the tax, according to a new report from the European Commission.

Higher taxes “In general do lead to a reduction in the consumption of the taxed products,” the report concluded. However, consumers can use a variety of methods to purchase the foods they want while avoiding the tax, such as buying similar products that do no fall under same burdensome tax regime or switching brands.

Commissioned by the directorate general for enterprise and industry of the European Commission, the study also argues that fat taxes could have a damaging impact on the EU’s agri-food sector.

SMEs would be particularly vulnerable to fat taxes as consumers switch from premium brand producers to cheaper alternatives. Furthermore, taxes would increase the administrative burden, especially if the taxes are imposed on ingredients or if the rules defining which products are liable under the tax are highly differentiated and complicated.

Director of lifestyle economics at the Institute of Economic Affairs (IEA) Christopher Snowdon, told City A.M.:

It’s a basic economic principle that when prices go up, consumption goes down. But price rises have other effects, as this study shows, such as making consumers buy cheaper brands from cheaper shops. People will go to any lengths to eat the food they like, and that is why fat taxes never have any measurable effect on obesity.

The report’s warnings echo research conducted by the IEA last year on Denmark’s saturated fat tax. The tax had a variety of negative economic impacts including the loss of 1,300 Danish jobs. At least 10 per cent of the revenue generated by the tax was ploughed back into administration.

One survey found that only seven per cent of Danish consumers cut their purchases of butter, cream and cheese while 80 per cent did not change their shopping behaviour at all.

However, some Danes did switch brands, and others hopped over the border to Sweden and Germany to shop for their favourite high-fat foods.

The Danish government had hoped to collect 1bn krone (£115m) from the tax. But the amount raised came in at 1.4bn krone, suggesting that reduced saturated fat consumption was less than hoped for.

At the same time, the tax was in operation the market for crisps and snacks grew rather than diminished. Public opinion turned overwhelmingly against the tax. In October 2012, 70 per cent of Danes considered the tax to be “bad” or “very bad.” The policy was abandoned 15 months after its introduction.

UNESDA, which represents the soft drinks industry, said the Commission study, “finds hard evidence from a number of member states on the negative impact which food taxes can have on competitiveness and jobs, leading to an increase in administrative burdens.”

However, while the study made some initial conclusions, it also found that further research will be needed in order to assess more extensively the impact fat taxes could have on the competitiveness of the agri-food sector.


Read the full article here

Labour says no to a tax on high-sugar food and drink

Luciana Berger

Shadow health minister Luciana Berger this week ruled out the possibility of a Labour government imposing additional taxes on
fizzy drinks and other high-sugar products.

In an exclusive interview with The Grocer, Berger said the party had decided against backing a sugar tax because it would increase food prices and be seen to punish cash-strapped consumers.

“We have never said we are in favour of a sugar tax and I can categorically say that isn’t the case,” said Berger, who this week hosted an obesity debate in Westminster involving MPs, NHS bosses, NGOs and the food industry.

Campaign group Action on Sugar and the National Obesity Forum have recently supported the idea of taxing products high in sugar. But Berger, whose party is
coming towards the end of a review of its public health policy, cautioned against the approach.

“We should not be looking at any food ingredient in isolation,” she said. “Obviously, we have to do something to tackle the obesity crisis and one of the things that we have to look at is sugar. But there is no specific sugar policy. What we are suggesting is limits on the amount of sugar, salt and fat in food and we will be bringing these forward before the next party conference.”

Berger said Labour was also looking at regulation which could stop fast food restaurants such as McDonald’s being located in close proximity to schools and added that “stores like WHSmith which sell a huge amount of sweet confectionery were also “high on our radar”.

The shadow minister, who has been behind an avalanche of parliamentary questions attacking the closeness of the DH to food companies, would not go as far as confirming Labour planned to scrap the Responsibility Deal but said: “It clearly isn’t working.”

Les taxes dites « comportementales » présentent de nombreux écueils, selon une nouvelle étude de l’Institut économique Molinari (IEM)

Les taxes dites « comportementales » présentent de nombreux écueils, selon une nouvelle étude de l’Institut économique Molinari (IEM)

Paris, le jeudi 30 janvier 2014 – Sous prétexte de changer les habitudes de consommation, nombre de nouvelles taxes ont déjà été proposées : taxe sur le gras au Danemark, taxe « Nutella » et taxe « sodas » en France, etc.


Si taxer les « vices » est politiquement attrayant, une telle instrumentalisation de la fiscalité cause toutes sortes d’effets indésirables sans pour autant changer les modes de consommation.


Pas d’amélioration pour les finances publiques


L’argument de l’existence de « coûts sociaux » liés aux comportements à vices, estimés à plusieurs dizaines de milliards d’euros, est avancé suggérant que leur suppression permettrait d’assainir les finances publiques.


Cette idée ne résiste pas à une analyse globale de la question, en particulier si on constate que les personnes s’adonnant à leurs « vices » (tabac, alcool, obésité, etc.) ont malheureusement une espérance de vie moins élevée que les autres.


Ces dernières – par leur mode de vie plus sain – occasionnent de fait des coûts supplémentaires aussi bien en matière de santé que de retraites. Or, ces coûts supplémentaires pourraient contrebalancer voire dépasser les surcoûts générés par les consommateurs de produits « viciés » et empêcher ainsi l’amélioration des finances publiques.


Des études débouchent ainsi sur les résultats suivants :


  • Tabac : en l’absence de fumeurs, les coûts de santé auraient été plus élevés de 7% chez les hommes et de 4% chez les femmes (Pays-Bas).
  • Coûts de santé des personnes non fumeurs et non obèses : près de 28% de plus que ceux des fumeurs et 12% de plus que les personnes obèses (Pays-Bas).
  • Impact financier net du tabagisme : +0,32 dollars par paquet vendu, soit des « économies » pour les comptes publics, sans tenir compte des recettes fiscales liées au tabac (États-Unis).


Enfin, même s’il s’avérait que les vices pesait sur les comptes publics, la raison en est que les gouvernements, en imposant des régimes publics obligatoires notamment en santé, ont supprimé l’évaluation des risques (liés au tabac, à l’obésité, etc.).


Des effets inattendus en matière de santé publique


Si les ventes officielles du produit surtaxé sont susceptibles de baisser, les consommateurs tendent à lui substituer un autre produit tout aussi, voire plus nocif au détriment des objectifs sanitaires affichés par les pouvoirs publics.


Plusieurs études ont mis en évidence de tels effets indésirables :


  • Taxe sodas : effet minime ou inexistant en matière d’obésité, les enfants et adolescents se mettant notamment à consommer d’autres boissons caloriques moins chères (États-Unis).
  • Fat tax : effet de substitution par des achats transfrontaliers et des achats de produits moins chers souvent de moindre qualité (Danemark).
  • Taxes sur l’alcool : effet de substitution par des boissons moins chères et/ou plus fortes; substitution par d’autres drogues (cannabis).
  • Taxes sur le tabac : effet substitution par des cigarettes moins chères; consommation plus intense des cigarettes fumées (plus de nicotine ou de goudron absorbés par cigarette).


La cause du marché parallèle et du trafic illicite


Les taxes comportementales ouvrent automatiquement la voie au marché parallèle, que ce soit sous la forme d’achats transfrontaliers (cas de la fat tax au Danemark) ou d’achats « au noir » qui peuvent représenter 10% du marché de l’alcool au Royaume-Uni, et 20%, ou plus, du marché des cigarettes en France.


Ce n’est pas la nature du produit surtaxé en soi, ou le « vice », qui est à l’origine de la contrebande, mais la fiscalité qui en est la cause nécessaire et suffisante. La preuve en est que dès lors que des produits aussi ordinaires et « vertueux » que le sel (exemple de la gabelle en France) ou le savon (cas de l’Angleterre jusqu’à la moitié du 19ème siècle) sont fortement taxés, ils deviennent rapidement l’objet de contrebande, accompagnée de son lot de crimes, de corruption et de violence accrue.


Intitulée Les écueils de la fiscalité dite « comportementale », l’étude préparée par Valentin Petkantchin, chercheur associé à l’Institut économique Molinari, est disponible sur le site.