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World's first food fat tax imposed in Denmark
World's first food fat tax imposed in Denmark
An attempt to limit the intake of fatty foods, it will be levied on all products that include saturated fats.
Last Modified: 01 Oct 2011 20:50
Denmark has imposed a fat tax in attempt to limit the population's intake of fatty foods, becoming the first country to take such a measure.
The new tax will be levied on all products that include saturated fats - from butter and milk to pizzas, oils, meats and pre-cooked foods.
The measure, designed by the outgoing government and announced on Saturday, will add 16 kroner [$2.87] per kg of saturated fats in a product.
Consumers over the past week hoarded butter, meat and milk to avoid the immediate price increase.
"We have had to stock up with tonnes of butter and margarine in order to be able to supply outlets," Soeren Joergensen of Arla Distribution told the AFP news agency.
Christian Jensen of an independent local Copenhagen supermarket said: "It has been a chaotic week with a lot of empty shelves. People have been filling their freezers.
"But actually I don't think the tax will make that much difference. If people want to buy a cake, they will buy it. But right now they're saving money."
Bureaucratic nightmare
Denmark's Confederation of Industries (DI) said that the new costing system was a bureaucratic nightmare for producers and outlets.
"The way that this has been put together is an administrative nightmare, and I doubt whether it will give better health. It's more just a tax," Gitte Hestehave, DI foodstuffs spokeswoman, told AFP, adding that the costs of levying the tax would be passed on to consumers.
Hestehave said that setting prices on domestically produced or imported goods was complicated, as it required declarations from producers both as to how much saturated fat was in the product itself, and used in its preparation.
Computer systems all had to be adjusted, adding many man-hours to administrative tasks for producers and sellers.
"Products that include other products that include saturated fats also have to have new prices worked out. Imported goods require a declaration from the producers abroad on exactly how much saturated fat has been used in production," Hestehave said.
"As far as we have been able to determine, Denmark is the first country in the world to introduce a fat tax, but we know that other countries are following us closely and have their own plans," she said.
EU studying tax
Some experts, however, say that the new Danish tax may not last long.
Jeppe Rosenmejer, an EU legal expert of the Danish Federation of Small and Medium-sized Enterprises, said the EU was studying the tax as there may be a competition issue.
While producers in Denmark have to pay the tax at source, for imported goods it is calculated by the distributor.
"This can mean that imported goods will be cheaper than domestically produced items," Rosenmejer told the national Jyllands-Posten daily.
A Danish producer will have to pay the tax on all of the saturated fat used, including for example what a product is fried in, he said. An importer may only be paying according to what is actually in the finished product.
"Hopefully the tax will be short-lived," Rosenmejer said.
The right-wing government that decided on the tax was superceded by a centre-left administration in elections last month.
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