EU Dairy Industry Opposes Danish Fat Tax

According to the EDA, this tax raises considerable concerns with regards to its social and economic impact and potential consequences for the health situation of the Danish population.

Oct 19 2011 --- The European Dairy Association (EDA) strongly opposes the recently introduced saturated fat tax in Denmark. According to the EDA, this tax raises considerable concerns with regards to its social and economic impact and potential consequences for the health situation of the Danish population.

Denmark has introduced what is believed to be the world’s first fat tax, applying a surcharge to foods with more than 2.3 % saturated fats, indicating that this should help combat obesity and heart disease. The new tax of 16 DKK (2.15 Euro) per kilogram of saturated fat in a product will be levied on foods such as cheese, butter, pizza, biscuits, oils and meat. According to the European Dairy Association (EDA), the Danish tax runs into extensive criticism because it increases administrative burdens for the Danish as well as foreign industries and creates inequalities between domestic and imported products due to differences in taxation depending on solely the content of saturated fat in the food or, in addition, the saturated fat used in preparation when the food is produced in Denmark. This creates an imbalance in the internal market which has to be discussed on European level. The tax is also believed to hit lower-income households more severely. These households spend relatively higher percentages of their income on food, and they tend to buy more prepared foods, meaning that they will be paying more for their food, as a percentage of their total income, than higher-income families. “We cannot support the introduction of this tax”, explains Joop Kleibeuker, Secretary General of the EDA. “Saturated fat in milk consists of a range of fatty acids with different effects on human health. Recent scientific publications reveal that the matrix of the food in which the nutrients are contained has an impact on their health effect. The food matrix influences the effect that saturated fatty acids may have on risk for cardiovascular disease. Drinking milk is not associated with increased risk. The EDA therefore considers that a saturated fat tax on dairy products – including full fat dairy products – is not justified.”

Mrs Kirsten Holm Svendsen, Director of the Danish Dairy Board Brussels, seconds this point of view and sees several reasons why the tax is not beneficial for the Danish consumers and industry: “Firstly, this tax might influence consumer choice towards products that might not necessarily the healthier options. Also, nutrient-rich dairy products, such as cheese, which will be covered by the tax, offer an important contribution to the daily diet of the Danish consumer and it’s clear that those products should not become a second choice.”

“Furthermore, changes in consumer behaviour will have an impact on sales, and together with the administrative burden brought by this tax, this will have a major impact on both the industry and the retailers which is a very questionable development in the view of employment, competitiveness and growth. Finally, we believe that trade in Denmark will be affected since we are already confronted now with certain importers limiting their product range for the Danish market because of the tax”, Mrs Holm Svendsen concludes.