Fat tax

A fat chance | The Economist

Here in the UK, we are bombarded with statistics about obesity. Our BMI's are constantly scrutinised and obesity has become a serious financial burden on the NHS. However, Denmark went even further than to simply address the problem; it imposed a 'fat tax'.

Time for another Big Mac

Though it may have been called a 'fat tax',  Denmark's tax in actual fact did not tax fat people. What it did tax was food with high fat content, particularly saturated fats. Ice creams and crisps saw a surge in prices. Sales of unhealthy foods fell dramatically and it seemed that Denmark had achieved the dream of reining in the surge in obesity levels. The reality proved to be more of a nightmare for the Nordic nation.

By its nature, the tax affected all foods with high fat content. This included high-end cheeses and even bacon. Gourmet cheese producers saw their cheese prices increase by up to 25%. As independent butchers began to struggle thanks to an increase in meat prices, supermarkets were able subsidise them with their profits from other products, effectively reducing competition in the food industry. Families also began to embark on junk-food tourism, travelling to neighbouring nations to purchase cheap sweets and fizzy drinks, costing the Danish taxman $1.8 billion.

In response, the Danish government has abolished the so-called 'fat tax'. Though health activists argue that the state has valued the economy over the health of the public, it is clear that the implementation of the tax was carried out badly. It seems that as much as the state can change the size of our wallets, it cannot do the same for our waistlines.