Government doubles tax on sugary drinks
Perhaps The Coca-Cola Company should speed up the roll-out of Tumult. On 5 October 2011 the French Government released more details of a plan to levy a tax on fizzy drinks, which is part of an aggressive campaign to fight a growing obesity epidemic. A recent study found that a diet of junk food is turning the traditionally skinny French into a nation of fat bottoms.
The French government wants to impose a EUR 0.02 tax on cans of carbonated, sugary drinks – double the original projection. Plans to impose a sugar tax were first announced in August and will come into force on 1 January 2012. The tax is expected to raise an extra EUR 240 million (USD 320 million).
Although the current plan does not apply to diet soft drinks, other French politicians are working to broaden the tax to artificially sweetened sodas like Diet Coke and Pepsi Max.
The increase will cost Coke EUR 80 million (USD 108 million) extra, the French newspaper Le Figaro said.
As well as objecting to the financial cost, Coca-Cola executives are furious about what they describe as government attempts to stigmatise their products as unhealthy in a similar way to tobacco.
In retaliation, the U.S. beverage company initially suspended, then re-affirmed, a EUR 17 million (USD 24 million) investment in its historic Pennes-Mirabeau plant near Marseilles.
France’s “sin tax” is setting an example that other European states seem only too willing to follow.
At the end of September 2011, the Irish health minister James Reilly said he was considering imposing a sugar tax like the French to combat obesity. The size of the tax is still undetermined.
Meanwhile Denmark has levied a new "fat tax" that will add about EUR 1 in cost per pound (half a kilogramme) of saturated fat to any food that contains more than 2.3 percent saturated fat. The tax is a complex one, but on 1 October 2011 consumers in Denmark saw a sudden jump in the cost of many of their favourite bread toppings. The average price of a half-pound package of butter increased by DKK 2.5 (USD 0.45). A pound of cheese rose from DKK 34.5 (USD 6) to DKK 36 (USD 6.50).
If government estimates are correct (and the tax ministry itself admits that its predictions are rough), the “fat tax” should result in revenues of DKK 1.3 billion (USD 233 million), and cut consumption of saturated fat by close to 10 percent, and butter consumption by 15 percent, it was reported.
The tax was approved by large majority in parliament in March as a move to help increase the average life expectancy of Danes – which has fallen below the international average of 79 years – by three years already.
The Danes’ public health worry-mongers have joined Hungary’s. In September 2011 Hungary slapped a tax on all packaged foods containing unhealthy levels of sugar, salt, and carbohydrates, as well as products containing more than 20 milligrams of caffeine per 100 millilitres of the product.
What next?
