17 October 2016

Taxes on sugary foods

Taxes on sugary foods
This is probably the most alarming development for food companies as it has a direct impact on the business and can lead to a spike in operating costs and decrease in sales, if the price of a tax is passed on to consumers.
Belgium, Finland, Hungary, and Latvia already have taxes specifically targeting sugar-containing food products (mostly soft drinks or/and confectionary). Discussions on a legislative proposal are currently underway in Bulgaria and Ireland, meanwhile the UK has recently announced it would introduce the Soft Drinks Industry Levy as of 2018. This Levy is now undergoing a public consultation.
Since taxation is the competence of each individual EU Member State, food businesses must closely follow developments in all Member States to be able to assess the situation and intervene on time, if needed.
Although a number of studies, including the most recent research done by the International Tax and Investment Center and Oxford Economics, confirm that the current data is insufficient to prove the impact of food taxes on public health outcomes, taxation is regarded by politicians as the most obvious solution to target unhealthy foods and this is unlikely to change in the short term perspective.
Yet, this approach raises some concerns as the adoption of behavioural taxes in various Member States will lead to the fragmentation of the EU internal market, with an increasing cost of compliance incurred by food manufacturers and retailers.
Would you like to find out more about the impact of sugar taxes on the EU internal market? Join our sugar policy roundtable with Therese Comodini Cachia MEP on 9 November

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