Knowledge for better food systems

NHF report: What is the role of health related food duties?

New duties on foods known to be unhealthy should be part of a package of public health policies to tackle overweight and obesity and other diet-related diseases, according to the National Heart Forum (NHF).

In its new report, the NHF recommends the introduction of duties on sugary soft drinks to curb consumption and raise revenues to support public health programmes or subsidise the cost of healthy foods such as fruits and vegetables.

The report, entitled ‘What is the role of health-related food duties?’ is based on evidence presented at a meeting of the NHF membership in June, and makes recommendations for Government action.

The NHF argues that there is a strong case for government intervention to improve public health.  It points to increasing rates of diet-related chronic diseases, and widening disparities in rates of these diseases between rich and poor, problems that are created by a food supply dominated by cheap, energy-dense and heavily marketed, processed food and drinks. In all EU countries, there are significant concerns about the dietary health of children and young people and about rising rates of overweight and obesity. The report argues that the costs of diet-related disease, which are borne by healthcare services and society, justify Government intervention.

Governments already use price supports to influence food prices and supply. VAT is already levied on foods and beverages, and the introduction of additional indirect taxes would be an adjustment of existing policy rather than a change of policy.

Hence the report makes 10 recommendations for policymakers:

  1. As a proportionate response to the current crisis in diet-related ill health, the application of additional taxes on foods known to be ‘unhealthy’ should be part of a package of public health policies.
  2. Excise duties are the most promising option because they offer the maximum facility for flexibility, control and focus of the tax instrument.
  3. Taxes applied to specific product categories, such as sugar-sweetened soft drinks (SSSDs), are straightforward to apply and are unlikely to have significant unintended effects.
  4. Price elasticity and cross-price elasticity effects must be carefully analysed to identify potential unintended effects.
  5. Duties on unhealthy foods are not likely to have substantial effects on changing consumption and supply patterns in isolation, but should be part of a comprehensive package of policy measures to shape food consumption and supply.
  6. Careful modelling of any new tax instruments is essential to understand how different types of consumers and businesses are likely to respond, and how combinations of taxes on unhealthy foods with subsidies on healthy foods could potentially achieve fiscally neutral policies.
  7. Concerns about regressivity must be taken into account, but should not, by themselves, be seen as barriers to implementing taxes on foods.
  8. Clear communication of the purpose of a tax and its potential benefits – including how revenues may be used to support health services or health programmes or to subsidise healthy foods – is crucially important, as it will determine public acceptance of the tax.
  9. The term ‘health-related food duty’ is recommended as it conveys the health purpose of the policy and the notion of responsibility underpinning the payment of duties on goods that contribute to social harms.
  10. Any proposed statutory instrument should be introduced with a ‘sunset clause’ so that it is subject to regulatory review after a specified period of time.

The NHF report is available here.

To discuss the role of fiscal instruments as well as other measures in fostering healthier and/or more sustainable diets, do visit the FCRN new ‘sustainable healthy diets’ forum pages here.

Additionally, a number of studies and articles on food taxes can be found on the FCRN website. And for a general overview on a range of market governance mechanisms and their potential role in influencing both production and consumption side GHG mitigation measures, see this study here.

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