Economics forces Denmark to drop fat and shelve plans for sugar taxes

The Danish government has revealed plans to drop its tax on saturated fats, introduced in October 2011, and shelve a proposal to introduce a tax on sugar from January 2013.

It is almost 12 months since Denmark introduced a tax of DKK16 per kg on saturated fat in food products including butter, milk, pizzas, oils, meats and pre-cooked foods. From the beginning of next year the government had planned to tax sugar in products such as confectionery, yogurts and jams.

Amid rising obesity levels worldwide, its actions were viewed by many health campaigners as a pioneering attempt to tackle the problem head-on.

Some, though, were critical of how the Danish government approached the issue, claiming the tax was motivated primarily by revenue concerns, rather than public health.

The crux now, however, is that the fat tax has been widely blamed for costing food manufacturing jobs and driving Danish consumers to cross the Danish/German border to stock up on tax-free foods.

The turn-about plans were revealed on August 28 as part of the Danish government’s budget proposals.

The Danes have a well-established love of butter – their Lurpak brand is wildly popular and is sold in outlets across the world – which led to an outcry that the tax was an attack on Danish culture and all they held dear.

Ole Wehlast, chairman of the Danish Food Workers Union, says plans to scrap the tax are “a victory for commonsense”.

“It was a do-nothing tax,” said Tam Fry, spokesperson for the National Obesity Forum. “All they were doing was to get some more money for the Treasury.”

He highlighted a recent study in the British Medical Journal, which argued that, for a so-called lifestyle tax such as this to work, it needs to be set at closer to 20%. “You’ve got to go for broke,” he said.

Still, Fry said a decision to drop the tax in Denmark would be symbolic for the wider debate on taxing foods linked to obesity. “It’s really unfortunate,” he said, speaking broadly as a supporter of such taxes.