Monday 29 April 2013

Denmark abandons the soda tax

Completely ignored by the British media, Denmark is abandoning its soda tax and is cutting beer duty because—guess what?—it turns out that simplistic 'public health' policies have unintended consequences.

A soda tax in Denmark didn't lead to people drinking fewer sugary beverages. Instead, they just headed next door to Germany, where sodas were cheaper.

Well, I'll be damned. In short, the Danes have had the same experience with the soda tax as they did with the disastrous fat tax.

The decision comes months after the government in Copenhagen repealed a similar tax on foods with high concentrations of saturated fats -- dubbed the world's first "fat tax." The measure was introduced with the intent to incentivize healthier eating, but authorities said it ultimately just drove up food prices and put jobs in jeopardy.

The message is clear. These policies are unpopular and people will search out cheaper alternatives whenever they can find them. Happily, the Danish government has come to terms with reality and is now rolling back prices.

The tax on soft drinks is to be halved by July and completely abolished by next year, making a 1.5-liter bottle of soda three kroner (€0.40) cheaper in the end. The lesser tax on beer is to be cut by 15 percent by July.

Finance Minister Bjarne Corydon told public broadcaster DR on Monday that the tax's repeal, which has broad support in parliament, would provide a "powerful growth spurt" to the Danish economy.

The same bone-headed 'public health' lobby that cried salt tears when the fat tax was dropped will doubtless complain that Denmark's (left-wing) government is putting financial considerations before health. There is, however, no evidence that either tax had any effect on health. Moreover, since these lobbyists' main justification for state interference in the nation's diet is that fatties cost the government money, they can't—or at least shouldn't—complain when governments try to save money.

Taxing 'unhealthy' food and drink remains a key priority for the public health industry, not least in the UK where a concerted campaign has been underway since the start of the year. Campaigners have so many computer models showing that these sort of taxes will be a terrific success that they are able to shrug off real world evidence such as Denmark's. Group consensus and computer models are reality in the public health bunker. But the fact remains that a country not so far from Britain has experimented with a fat tax and a soda tax in good faith but has swiftly abandoned them because (a) they don't work, (b) they are unpopular, and (c) they have unintended, albeit predictable, consequences which are bad for the economy.

Lesson learned? If only.


Junican said...

Good for the Danes! But how on earth did these silly taxes ever get imposed in the first place?

Would it not be wonderful if ONE country in the EU, which was not in hock to the EU central bank or the world bank or the IMF, not only abandoned smoking bans but also much reduced sin taxes?! Think of the boost to that country's economy from tourists!!

Anonymous said...

Because people doesn't always are informed... smoking ( ), as well as sodas and foods with high concentrations of saturated fats bring more health problems and this as a result means the government has to spend more money on doctor bills... that's why not just in Europe but all over the world they are trying to get people eat and live a more healthy life

Good think smoking is decreasing in first world countries too bad tobacco companies are selling cigarettes like crazy to 3rd world people ( )

Hopefully one day we get to see a world without people smoking

I'm amazed at how much they smoke in Denmark, I don't know if this is the same all over Europe, and how people don't even care about how their smoke affect the health of the persons around them, like kids: "Non-smokers who are exposed to second-hand smoke at home or work are thought, due to a wide variety of statistical studies, to increase their heart disease risk by 25–30% and their lung cancer risk by 20–30%. Second-hand smoke has been estimated to cause 38,000 deaths per year, of which 3,400 are deaths from lung cancer in non-smokers"