Denmark Introduces Fat Tax

October 5, 2011

Denmark has imposed what it calls a "fat tax" on foods such as butter and oil as a way to curb unhealthy eating habits.  While the country has already implemented initiatives to tax unhealthy products such as sugar and soft drinks, the breadth of the fat tax is largely unprecedented, says the Washington Post.

  • Based not only on the presence of saturated fats in the finished product but also on the fats used to make it, the fat tax is set at approximately $2.90 per kilogram of saturated fat.
  • It is expected to raise the price of a standard burger about 15 cents.

The purpose of this new tax, says the Danish parliament, is to increase the life expectancy of the Danish population.  While above the world average, the life expectancy of Danes lags behind that of their European neighbors.  Placing this issue at the forefront, government officials cite the correlation between fat-heavy diets and cardiovascular disease and cancer when justifying the new tax.

It bears mention that because of its two-pronged structure, the tax will not only make the consumption of fat-heavy foods more expensive, but it will also increase production costs by taxing fats used in creating the products.  It is estimated that simply garnering the information necessary to pay the tax, not including the tax itself, will cost Danish businesses $28 million in the first year of the tax's implementation.  This complicated structure has damaged its popularity and led to pressure from interest groups to simplify the tax.

Source: "Denmark Introduces Fat Tax to Curb Unhealthy Habits, Improve Life Expectancy," Washington Post, October 2, 2011.

 

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