Blog: Chris MercerDrinks tax moves up the agenda

Chris Mercer | 28 October 2011

The idea of a sin tax on unhealthy food and drink is gaining credence as Governments seek to plug revenue holes any way that they can.

Within the last month, France's Parliament has voted to introduce a special levy on added sugar soft drinks, as well as a lesser levy on soft drinks containing sweeteners. In Denmark, meanwhile, the Government there has said it will introduce a tax on fatty foods, thought to be the first targeted 'fat tax' anywhere in the world.

It is a scenario that alcohol producers are already well aware of. The European Commission and the World Health Organisation have both endorsed duty tax rises on alcohol as one of several means of persuading people to stop drinking to excess.

The health debate around alcohol, fatty foods and added-sugar soft drinks has been raging for some time. But, are we witnessing a change in governmental thinking? 

It's hard to judge, because individual governments have their own agendas and ideological positions. In the UK, for example, ministers of the Coalition Government, elected last year, have been clear that they are not seeking to change consumer behaviour via regulation. This, however, has not stopped the UK Treasury from increasing duty tax on beer, wine and spirits.

There are signs that the effects of so-called lifestyle diseases are being taken more seriously, as witnessed last month by the United Nations holding its first General Assembly meeting on non-communicable diseases.

Over the next 20 years, non-communicable diseases will cost the global economy more than $30tn, or 48% global gross domestic product (GDP) in 2010, UN delegates were informed by the director-general of the World Health Organisation, Dr Margaret Chan.

At the same time, many national and state economies are under intense pressure to increase revenue and cut debt. The logical conclusion is that sections of government health departments that are in favour of taxes are perhaps finding more friends in government finance departments. More sin taxes, then, could well be on their way.


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