Many people argue that when it comes to taxing sugar-sweetened beverages, the potential benefits outweigh the costs. This is not the case. The reality is that these taxes – which are often introduced with the goal of improving public health – are overwhelmingly unsuccessful.
Take Denmark for example, a country that introduced a “fat tax” in 2011, only to abolish the tax 15 months after it went into effect.
“It had very little effect on the consumption of saturated fat because Danish shoppers downgraded to cheaper brands from budget supermarkets, often in cheaper countries. It did, however, clobber the poor – as indirect taxes usually do,” said Christopher Snowdon, director of lifestyle economics at the Institute of Economic Affairs, in the United Kingdom’s Spectator.
Yet the debate around the success of the tax has resurfaced. Public health activists are now arguing that the tax was successful because it generated revenue and resulted in reduced consumption of saturated fats in the first three months.
However these alleged results are flawed. Since many of Denmark's citizens anticipated the tax-taking effect, they stocked up on butter and cooking oils in advance. When their stockpiles became depleted – around Christmas time - sales returned to normal and remained there. And the revenue the tax generated serves as proof that consumption did not decrease.
Snowdon concludes, “The reality is the tax had little or no effect on dietary habits, obesity and health. It failed to do what it was supposed to do and so the Danes sensibly got rid of it.”
Rewriting the story about the success of the “fat tax” is simply an attempt by some in the public health community to further their crusade against sugar-sweetened beverages. However, the result will remain the same. It’s simple, taxes don’t make people healthy.
To learn more about why taxes on common grocery items don’t help improve public health, visit, YourCartYourChoice.com.