Does tax on “unhealthy” foods lower obesity rates?

02 May 2024

As reported in an article by FoodNavigator Europe, obesity has significantly risen over the past forty years to such an extent that the European Union now declares it a “serious public health problem”.

Governments are working to address this issue and one of the most implemented methods is the taxation of unhealthy foods. Unhealthy foods are recognised to be foods that are high in fat, salt, and sugar (HFSS).

A study commissioned by the Dietary Improvement Team at the Office for Health Improvement and Disparities found that a tax on this type of foods directly affects the sales of these products.

The review analysed findings from 20 separate country studies. According to Dr Elisa Pineda, an Imperial College research fellow, this research is a “crucial step towards helping countries create health policies that can significantly reduce the burden of disease and enhance the quality of people’s health.”

In Mexico, an 8% tax on non-essential, energy-dense foods saw an 18% reduction in sales in supermarkets. The decrease was even more noticeable among low-income groups, who were greater consumers of the taxed foods beforehand.

In Europe, several countries including Denmark, Finland and Hungary have already implemented taxes on unhealthy foods.

The study also showed that high tax rates should be accompanied with subsidies on healthier foods such as fruits and vegetables, to have a real impact on obesity levels and encourage healthy eating.

Taxation could also help to reduce obesity through reformulation. Indeed, taxation would prompt brands to reformulate to avoid taxation, leading to all consumers buying healthier products.