Inflating health concerns? Europe’s new leaders sideline junk food taxes amid cost of living crisis

28 Sep 2022 --- New political leaders in the UK, Italy and Sweden look set to reject taxes on unhealthy foods amid historically high inflation levels that are crippling the purchasing power of the low and middle classes. 

The UK’s new Prime Minister Liz Truss came under pressure from health groups to maintain the tax on sugar in soft drinks and uphold anti-obesity plans. However, political opposition that previously supported taxes on unhealthy foods is faltering amid dizzyingly high food inflation of 13.1%.

Truss’ government is delaying the ban on junk food TV advertising before 9 pm and paid-for online advertisements until 2024 – after an initial pushback to 2023.

Prominent political opponents to Truss are retracting the pressure on her government plans, with members of the Labour party stating that they would not impose anti-obesity rules when food costs are rising, pivoting from previous party stances on the issue. 

“I’m not tin-eared enough to say that a Labour government would do that in the middle of a cost of living crisis. I don’t think that would be the right thing to do right now,” says shadow health minister for the Labour party Wes Streeting.

Streeting adds that new taxes on sugar would not be implemented if Labour was in power until the cost of living crisis abates. 

Food inflation is rampant in the UK, Italy and Sweden, surpassing double digits in all three countries.Sugar tax “a scam”
Meanwhile, Giorgia Meloni, the leader of the Brothers of Italy party, is set to become prime minister in Italy amid complex economic uncertainties. She has previously stated that the country’s sugar tax – which has not yet been implemented – is “a scam” and “damaging” for businesses. 

Meloni’s party does not mention scrapping sugar or junk food taxes on its electoral program.

If no administrative action is taken, the tax will be effective from January 2023, most probably under her administration. Taxing €10 (US$9.55) per hectoliter for finished products and €0.25 (US$0.24) per kg for products designed to be used after dilution.

Empowering individual responsibility
Sweden does not have a sugar tax, and its implementation was not discussed during the recent electoral campaign. The party appearing most likely to form a new government – the Moderates – has hailed “personal responsibility and freedom” as one of its cornerstones.

“Citizens are allowed to be adults to bear responsibility for themselves, for their loved ones and for our society,” the party states in its political manifesto.

The party does not mention a potential sugar tax on its electoral program and there is currently no tax on the ingredient.

The Nordic country also benefits from Norwegian shoppers buying its sweets, chocolates and other confectionery goods, as Norway imposes some of the world’s highest taxes on these products – 8.6 Norwegian Krone (US$0.82) per kg.

The Food and Agriculture Organization Corporate Statistical Database puts sugar consumption per capita (per year) in Norway at 27.1 kg, similar to the 27.9 kg in the UK, where a sugar tax is still in place. In comparison, Sweden consumes 33.7 kg per capita and Italy 31.9 kg. 

Cost of living crisisTruss’s government is delaying the ban on junk food TV advertising before 9 pm and paid-for online advertisement until 2024.
Food inflation is rampant in the UK, Italy and Sweden, surpassing double digits in all three countries – 13.1%, 10.6% and 14.1%, respectively. Taxes on junk food and sugar could help curb inflation but at the same time they would disproportionately affect the budgets of the poorest families in those countries.

The cost of obesity and its stress on national healthcare costs also needs to be added to the equation.

The yearly economic impact of obesity in 2022 for the UK is equal to US$62.4 billion, costing businesses in the country US$29.9 billion per year, according to Maria Larsson Ortino, ESG policy lead at LGIM.

However, health organizations claim that the justification for ending health food and obesity strategies is shortsighted, as they might negatively affect the poorest members of society the most. 

Furthermore, according to the British Association for Nutrition and Lifestyle Medicine, reversing established plans could harm the benefits of previous spending, especially if an alternative plan is not implemented.

Sustain – the UK alliance for better food and farming – argues that a U-turn on unhealthy food taxes at this point will “undermine” the hard work and investments of businesses during recent years.

 By Marc Cervera