Fat tax draws foreign attention

Denmark’s ‘fat tax’ is first of its kind in the world – and the world will be watching the scales

October 4th, 2010 10:00 am| by admin

On the first day of October, Danish families woke up to higher prices on butter, cream, cheese and other foods with a lot of saturated fats when the country’s new ‘fat tax’ rolled into effect. But while Danes themselves took the change in stride, the tax garnered significant international attention.

BBC News and the Daily Telegraph in England, Time magazine and CBS News in the US, and the Arab-language news station Al-Jazeera are just a few of the global media that took notice. The Copenhagen PostÂ’s phone line even rang early Monday morning with a call from 6ix Radio in Perth, Australia, wanting to hear if there were riots in the streets.

So, why was everyone so interested in little DenmarkÂ’s latest sin tax? While other countries have introduced taxes on sugar, Denmark is reportedly the first to introduce a specific tax on saturated fats with the goal of curbing obesity.

Health experts estimate that ten percent of Danes are either overweight or obese and that four percent of all annual deaths can be attributed to unhealthy eating habits. But obesity is an even bigger problem in other developed nations, which is why health specialists and policy makers around the globe want to see if Denmark’s precedent-setting ‘fat tax’ will actually have a slimming effect.

The manager of Oxford University’s Health Promotion Research Group, Mike Rayner, is one expert who can’t wait to see the results – if any.

“ItÂ’s the first ever fat-tax,” Rayner told The Daily Telegraph. “It’s very interesting. We haven’t had any practical examples before. Now we will be able to see the effects for real.”

Rayner has campaigned to introduce sin taxes on unhealthy foods in England, where one-third of children and nearly two-thirds of adults are overweight, according to BBC News.

In America, more than two-thirds of the population is considered overweight, and 34 percent are obese, reports the US Centers for Disease Control. According to Time Magazine, these numbers are why America too will be watching Denmark carefully.

“Could a tax like this fly in the US?” wrote Time. “We’ve seen improvements in healthier school lunches and all sorts of initiatives to encourage exercise and healthy eating for kids, but a nationwide tax on unhealthy foods would be the most drastic—and maybe most effective—measure in fighting obesity. The world will be watching Denmark to see whether monetary incentive will make for a healthier nation.”

The fat tax amounts to a 16 kroner duty per solid kilo of saturated fat, but as most of us like our fat mixed with a few other ingredients, the actual price increase varies by food type. For example, a standard package of butter will now cost 18 kroner instead of 15.50, while half a kilo of 45 percent-fat cheese has gone from 34.50 kroner to over 36.

Everything with more than 2.3 percent saturated fat per total weight – from staple ingredients to packaged cookies – is subject to the new price hike. The Danish Agriculture and Food Council estimated that it will cost the average family with two adults and two children an extra 1,000 kroner per year if they continue to eat the way they did before the fat tax.

The question on everyone’s mind is whether Danes will pay up or slim down – and what effect that will have on basic health and mortality.

Lone Saaby, director of business policy for the Danish Agriculture and Food Council, for one, is sceptical.

“I have a hard time seeing the health benefit of the fat tax,” she told Politiken newspaper. “They have levied duties on really normal basic foods like yogurt, liver pâté and other cold cuts with the Keyhole mark [a symbol designating ‘healthy’ foods], which were otherwise considered low-fat. It’s going to be difficult for consumers to get around the fat tax when they peer into the deli case.”

Consumers are not the only ones who will feel the pinch.

The Danish Chamber of Commerce estimates that small businesses will have to spend upwards of 100,000 to 300,000 kroner to update IT-programs to deal with the complicated duty structure on all the fatty foods.

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