Fat Taxes in the EU Between Fiscal Austerity and the Fight Against Obesity

Abstract

To discourage unhealthy eating and limit the population's intake of fatty foods, thereby alleviating the current obesity “epidemic”, an increasing number of countries across the industrialised world are considering levying taxes on unhealthy food. A “fat tax” may be defined as a tax or surcharge placed upon fattening foods, beverages or individuals with the aim to decrease consumption of foods that are linked to obesity. This is not an entirely new idea – some theorists, starting with Arthur Pigou, a 20th century English economist, have long presented the arguments for imposing special taxes on goods and services whose prices do not reflect the true social cost of their consumption. Examples of Pigouvian taxes are duties on cigarettes, alcohol, gambling and environmental emissions. Support for another such tax, a fat tax, is now spreading across the European Union. On 1 October 2011, Denmark introduced a tax on foods by targeting those products that are high in saturated fat. The Danish Act (hereinafter, Act) confirms the trend in various EU Member States to tax certain foods or consider taxing them in the future.