1. European Week Against Cancer 2013
The Aviva Stadium, Dublin
Action on Obesity

2. Tackling obesity in Ireland
Ms. Ursula O’Dwyer
Health Promotion Policy Adviser,
Department of Health, Ireland

4. Lessons to be learned from the Danish
food taxations
Jorgen Dejgaard jensen

5. European Week Against Cancer 2013
Jørgen Dejgård Jensen & Sinne Smed
Lessons to be learned
from the Danish food
taxations

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Main points
• General features and challenges regarding price instruments
in nutritional policy
• Taxation of sugar in beverages and confectionary in
Denmark
• The tale of the Danish tax on saturated fat in foods
• Background and design of the tax scheme
• Estimated effects of the fat tax
• Abolishment of the fat tax – what went wrong?
• Implications and perspectives to be drawn from the Danish
experiences so far

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Some general issues concerning price instruments
Are price instruments welfare improving?
Potential health benefits
Efficiency costs
Market challenges
Demand response to price changes?
Transmission of tax into consumer prices?
Border trade
Administrative challenges
Definition of products eligible for taxation
Enforcement and control
Political challenges
Resistance among stakeholders
Regressive effects on low-income households

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Danish Taxation of sugar in
beverages and confectionary

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Sugar taxation in Denmark
All foods are subject to 25% Value Added Tax
Additional taxes on luxury goods, including:
icecream, chocolate, nuts, confectionary
Additional tax on sugar-sweetened beverages ~
0.15€/liter
~ 6% price premium of brands,
~ 12% price premium of non-brands
Additional taxes are topped with 25% VAT

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The 2010 Danish tax reform and sugar taxation
• Tax on sweets, chocolate, sugar products and ice cream was increased
by 25%
• Tax on soft drinks (soda) with sugar increased by
25 %, and decreased by 37% on sugar free soft drinks, i.e. changes of
0.04-0.05 €/liter – or a couple of per cent price change
• Consumption effects of soft drink tax
o Estimated price elasticity: -1.2 (Adam & Smed, 2012)
o Pre-reform tax => about 10-12% lower consumption, compared to
situation without soda tax
o Reform effect => shift 2-5% of soda consumption from sugared to
sugar-free
o Beware of cross-price effects! Higher price on soda => higher
consumption of fruit drinks and other non-alcoholic caloric
beverages

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Danish soda tax abolished from July 2013!
As part of a recent policy package to enhance economic
growth, the Danish tax on soda will be abolished from July
2013 – and the tax on beer will be reduced.
Main arguments:
Cross-border trade was harmful to business in regions close to
the Danish-German border
Cross-border shopping per se generates excessive consumption
of soda and beer
Tax elimination/reduction reduces cross-border shopping
VAT on soda and beer remains in place

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The Danish tax on saturated
fat

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Background
Increasing concern for lifestyle-related diseases during the last
couple of decades – and for raising taxes to finance the
welfare state
First prospective estimates of Danish food tax reform in 2004
(e.g. VAT-reduction on fruits and vegetables, increased tax
on sugar, fat tax, tax on saturated fats etc.)
Disease Prevention Commission (Forebyggelseskommissionen)
established in 2008, including duty to investigate food tax
reform – report delivered in 2009
General tax reform, including saturated fat tax, agreed in 2010.
Decided in the Danish parliament in March 2011.
Saturated fat tax introduced by October 1, 2011

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The Danish 2010 tax reform
Reduced income tax rates
Increased tax on
• Energy, environment …
• Tobacco (€0.40 per 20 cigarettes)
• Sugar products (€0.48 per kg added sugar)
• Ice cream (€0.11 per litre)
• Sugared soft drinks (€0.04 per litre)
• Artificially sweetened soft drinks (-€0.04 per litre)
New tax on saturated fats in foods with saturated fat
content > 2.3g/100 g

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Tax on saturated fat
Tax paid on the weight of saturated fat in foods with content of
saturated fat exceeding 2.3 g/100 g: meat, dairy
products, animal fats, edible oils and fats, margarine and
spreadable, blended fats
Drinking milk was exempt from taxation
Tax rate: DKK 16.00 (€2.15) per kg saturated fat + 25% VAT
Example: Price of one 250 g package of butter (with saturated
fat content of 52%) increases by 2.60 DKK – an increase of
about 20%

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Administration of the fat tax
Tax was levied on
• Commercial manufacturers of food for consumption within
Denmark
• Importers of foods for consumption within Denmark
• Food produced for export is exempt from tax
• Small producers (turnover<€7000) are exempt from the tax
Calculation of taxation rate for meat
• Specific documented content of saturated fat
• Publicly available food composition saturated fat content data
• Standard animal-specific average saturated fat content rates

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Tax rates and price changes for meat due to fat tax
Saturated fat
content
(g/100g)
% Price
change
Standar-
dized
Real Current
price
(€/500g)
Unified
tax rate
Differen-
tiated
tax rate
Minced beef (9-15%) 5.2 9.0-15.0 4.46 3.13 2.88
Tenderloin 5.2 2.7 12.44 1.12 0.23
Minced pork (9-15%) 6.5 9.0-15.0 2.68 6.52 4.80
Cutlet 6.5 6.7 4.2 4.16 1.06
Whole chicken 2.5 3.3 2.68 2.68 1.32
Chicken breast 2.5 1.0 5.59 1.20
Source: Smed (2012)

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Tax rates and price changes for meat due to fat tax
Saturated fat
content
(g/100g)
% Price
change
Standar-
dized
Real Current
price
(€/500g)
Unified
tax rate
Differen-
tiated
tax rate
Minced beef (9-15%) 5.2 9.0-15.0 4.46 3.13 7.53
Tenderloin 5.2 2.7 12.44 1.12 0.58
Minced pork (9-15%) 6.5 9.0-15.0 2.68 6.52 12.53
Cutlet 6.5 6.7 4.2 4.16 2.62
Whole chicken 2.5 3.3 2.68 2.68 3.53
Chicken breast 2.5 1.0 5.59 1.20 0.48
Source: Smed (2012)

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Preliminary effect estimates
Fat tax was implemented by October 1, 2011
GfK Household ConsumerTracking Scandinavia weekly
household panel (cohort) data, january 2009 - december
2011
Fats and oils: butter, mixed butter, margarine and vegetable
oils
Econometric analysis:
Compare purchased quantities and prices for
September, October, November, December 2011 with
corresponding months from the previous years

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Effect of DK fat tax on consumption of fats and oils -
preliminary estimates
-1.00
-0.80
-0.60
-0.40
-0.20
0.00
0.20
0.40
Butter Mixed butter Margarine Oils
kg/head/year
Statistically significant Not statistically significant

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Hoarding effects prior to the introduction of the tax
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
0.045
0.05
1
5
9
13
17
21
25
29
33
37
41
45
49
53
57
61
65
69
73
77
81
85
89
93
97
101
105
109
113
117
121
125
129
133
137
141
145
149
153
vol_fedt
Oct. 1, 2011
Fat products‟ share of total purchased food quantities per week, 2009-2011
2009 | 2010 | 2011

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The fat tax has given food suppliers an opportunity for
new price structures
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Pricechange,DKK/kg
Theoretical Supermarkets Discount stores Discount stores - signif. dev.
Change in fat product prices after tax

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Abolition of the fat tax – what went wrong?
In the agreement upon the Fiscal Budget 2013, abolition of the
fat tax from January 1, 2013, was decided. The tax got 15
months
The loss of revenue was compensated by an increase in the
income tax rate
What happened?

24. European Week Against Cancer 2013 24
Political processes surrounding the fat tax
Primary objective at introduction: Reduce
income tax and upward pressure on wages
Designed by Ministry of Tax
Limited involvement of stakeholders,
authorities, experts
Weaknesses in design and low
commitment
Few advocates to stand up against critique
Change of cabinet, Sept 2011
Primary objective at abolition: Protect jobs
”… Heavy administrative
burdens…”
” … Consumers shop across the
border…”
”… Loss of jobs…”
”… Tax harms the poor…”
”… Tax doesn‟t improve health…”

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Political resistance
SURVEY: ”A majority of Danes reject higher food taxes”
”Do you agree or disagree with the following statement?”
0 5 10 15 20 25 30 35 40
Don't know
Fully disagree
Disagree
Agree
Fully agree
per cent
Higher tax on candy, icecream, soft drinks, beer etc.
0 10 20 30 40 50
Don't know
Fully disagree
Disagree
Agree
Fully agree
per cent
Higher tax on fat foods (e.g. dairy and meat products)
Source: Interresearch for Danish Grocers’ Association (DSK), March 2012 / Børsen, April 20, 2012

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Implications and perspectives
to be drawn from the Danish
experiences so far

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Some perspectives on the Danish food taxes
Effects of the Danish taxation of sugar-sweetened beverages
and other sugar products have not been evaluated, but they
are expected to have a reducing effect on consumption
The Danish fat tax generated revenues for the government
(about 1.2 billion DKK in tax revenues is expected from the
Danish fat tax in 2012)
The fat tax seems to have affected the consumption of fats
while in place
Administrative feasibility of the tax – for authorities as well as
for the industries - was found to be a critical issue
The tax opened a „window of opportunity‟ for retailers to
restructure their price setting, product sizing, marketing

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Lessons learned about health-motivated food tax
schemes
It is important that
… a health-motivated tax is transparent
… a tax scheme is backed by experts and professionals
… potential health benefits can be understood and
recognized by the consumers and other stakeholders
… administrative burdens to the industries are kept at a
level that can be coped with.
… economic and political challenges related to the
scheme are dealt with

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References/contact info
 Contact: ss@foi.ku.dk and jorgen@foi.ku.dk
 Simulation studies on food taxation
 Smed S., J.D. Jensen and S. Denver (2007): Socio-economic characteristics and the effect of
taxation as a health policy instrument Food Policy. Food Policy, 32(5-6):624-639
 Jensen, J.D., and S. Smed (2007): Cost-effective design of economic instruments in nutrition
policy. International Journal of Behavioral Nutrition and Physical Activity 2007, 4(10)
 Danish academy of technical sciences (2007): Economic nutrition policy tools - useful in the
challenge to combat obesity and poor nutrition? Downloadable from
http://www.atv.dk/uploads/1227087410economicnutrition.pdf
 Holm A.L., Laursen M-B., Koch M., Jensen J.D. & Diderichsen F (2013) The health benefits of
selective taxation as an economic instrument in relation to ischaemic heart disease and nutrition-
related cancers, Public Health Nutrition, doi: 10.1017/S1368980013000153
 On the Danish fat tax
 Smed S., A. Robertson (2012): Are taxes on fatty foods having the desired health impact? BMJ
editorial, BMJ 2012;345:e6885
 Smed S. (2012): Financial penalties on foods - The fat tax in Denmark. Nutrition Bulletin. Vol. 37,
no 2. pp. 142-147
 Jensen J.D and S. Smed (2012): The Danish tax on saturated fat. Short run effects on
consumption and consumer prices of fats. FOI Working paper, no.14/2012
Downloadable from www.foi.dk

30. European Week Against Cancer 2013 30
jorgen@ifro.ku.dk

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Regression: Households’ annual fat tax payment
0
200
400
600
800
1000
1200
Tax-DKK/year
Household income, DKK/year
Cakes etc.
Meat products
Cheese, other dairy
Fats
Sources:
Danish Ministry of Tax Affairs,
Statistics Denmark

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Households’ fat tax payment, relative to consumption
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
Per cent of food budget
Per cent of consumption
budget

33. Food Policy in Practice
Dr. Cliodhna Foley-Nolan
Director of Human Nutrition, Safefood

34. Food Policy in
Practice
Cliodhna Foley-Nolan,
May2013.

35. Food Policy-Practice Translation!!!
In theory, practice is simple
Beware… I have proved it correct,
not tried it…

36. Food Policy + Practice

37. Programme for Government
2011-’16
Modern, fair, socially inclusive
and equal society
Agriculture
Trade
Social protection
Health
Transport
Finance

38. 1. Food poverty-health inequalities
2.Recent policy developments
3.All island collaboration (AIOAF)

39. Food Poverty
“the inability to access an adequate quality or
sufficient quantity of food in socially acceptable
ways, or the uncertainty that one will be able to
do so” Riches 1997.
“the poorer people are, the worse their diet and
the more diet related disease they suffer”
Faculty Public Health UK

40. ‘Penny dinners’

41. Eat less well
Mean intakes Food Groups disadvantaged
and advantaged women
Food Group Median Intake (g/day)
Disadvantaged Advantaged
Fruit and Vegetables 172 405
Breakfast Cereals 4 29
Sweet foods and
Confectionary
67 64
Dairy Products 166 228
HFFA 2009

42. Eat less nutritious food
Socio-economic differences in energy,
fibre and macronutrient intakes
Recommended
Daily Intake
Disadvantaged Advantaged
Energy ~2000kCals/day 2329 1978
Dietary Fibre >25g/day 10.1 12.6
Total Fat <33% Total
Energy
35.3 30.7
Saturated Fat <10% Total
Energy
13.9 11.6
Safefood/DCU

43. Relative prices:

44. Planning +Transport

45. Health Burden
50% CHD deaths
33% Cancer deaths
Low birth weight and Macrosomia
Depression- dementia
…

46. Associated-Diabetes rates
Population prevalence rates of diabetes; across deprivation bands in
Northern Ireland within age group (2007)
IPH

47. Overweight

48. Sociodemographic Distribution of
Overweight and Obesity
BMI
Self-reported
BMI
Measured
N=9,735 N=2,170
Overweight Obese Overweight Obese
GENDER (%) (%) (%) (%)
Men 43 15 45 22
Women 29 12 32 24
AGE GROUP
18-29 23 6 27 11
30-44 37 15 39 22
45-64 44 19 45 32
65+ 40 14 41 30
SOCIAL CLASS
SC 1-2 39 13 40 22
SC 3-4 36 14 37 24
SC 5-6 36 17 42 29
Slan

49. Children’s growth/development:

50. Food Deprivation~ 17% children

51. Safefood: Food Poverty
Public Policy- HFFA; SAGO Obesity;
Campaigns-Focus testing; Health literacy
Research –early school leavers
Existing channels-Resource centres,
Youthreach etc.
Initiatives-Community Food Initiatives;
Food Banking

52. Research Insights:
“Yeah well I’m not thinking long
term, I’m just trying to get by, day by
day”
“Rent, heat and electric come first…”

53. Food deprivation: 2003-10(composite index)

54. Primary and Secondary Schools

56. Community Food Initiatives
Cafes
Gardens
Classes
Social Capital
Little steps
+Weigh2live+ Stop
the Spread

57. Recent food policy developments:

58. Food and Health Policies…
<10% cals-Sat fat
<1% cals-Trans fats
<15% cals-free sugars
>400g fruit & veg
<5g salt
National, EU,Global

59. Dietary Policy Options
Eliminate choice
Restrict choice
Disincentives (tax)
Incentives (subsidies)
Change default option (reformulate)
Enable choice/Provide information
Do nothing
Nuffield Council Bioethics

60. Sugar Sweetened Drinks Tax

61. SSB Tax Proposal:
DOHC agenda Autumn 2011
Opposition: “regressive”, outcome
unpredictable, blunt instrument
?level of effectiveness
Issues: level of tax, ring fence tax take,
jobs and industry loss
HIA report, November 2012

62. Food Behaviour focus:
Practical cooking Shopping

63. Calories on Food Chain menus
25% cals eaten ,produced out of home(NANS
2010)
US: Reduction 152 cals hamburger joints,72cals
sandwich bars (female, educated)
Opposition =Catering industry
Calorie Calculator (SAGO)

64. Collaboration: Policy makers + Practitioners

65. Allisland Obesity ACTION forum
30 members
(Govt, Industry,
NGOs,
Practitioners)
2/year
Meeting
+Workshop

66. Food Policy and Practice counts!

67. European Week Against Cancer 2013
The Aviva Stadium, Dublin
Action on Obesity