Last week the government of Denmark announced it would scrap a controversial “fat tax” the country enacted last year. The Danish government also announced it would not be moving forward with a planned tax on sugar and sugary foods.
The Danish fat tax had targeted all foods containing more than 2.3% saturated fat, meaning it impacted not just potato chips but many popular foods considered by some to be healthy options—including meat, fish, dairy, eggs, avocados, chocolate, and nuts.
Is this rejection of food sin taxes in Denmark part of a larger movement against laws that meddle with food freedom? I think so, but first let’s take a look at what made Denmark turn against its taxes so quickly.
First, the fat tax appears to have been a failure as a public-health measure. Reports indicate it didn’t reduce obesity. The fat tax “failed to change Danes' eating habits,” reported Agence France-Presse.
Second, the law brought about a host of unintended—if predictable—consequences.
Some consumers were forced to pay higher prices. Or they simply got less for their money. Producers whose products were subject to the tax reduced the size of their food packages in order to keep post-tax prices the same.
In response, many Danes simply shifted their buying habits, choosing to purchase fatty foods in neighboring countries like Sweden and Germany—where food prices run close to 30% less than in Denmark.
Meanwhile, the fat tax and related administrative costs were particularly hard on small businesses.
As a result, the fat tax cost the country's struggling economy more than 1,000 jobs.
And while the tax helped the Danish government raise more than $200 million in new tax revenue, with job losses and sales taxes paid abroad, there’s no telling how much old tax revenue the government lost as the result of the fat tax.
I reached out seeking comment from columnist Mark Bittman of the New York Times, who positively gushed over the Danish fat tax last year when it took effect.
“Well lookee here: the inevitable move toward taxing unhealthful foods to raise income and discourage damaging diets has begun,” Bittman announced last year. He also predicted a wave of similar taxes would sweep across Europe and suggested the United States “needs these taxes more than any country in the world”—predicting “a serious celebration” if and when such laws come stateside.
Bittman hasn’t written about the law since it took effect around this time last year, hasn’t discussed its repeal, and didn’t reply to my email asking for comment.
A ballot measure in El Monte, CA, in Los Angeles County, was defeated earlier this month by a more than 3-1 margin. In Richmond, CA—just outside San Francisco—a similar measure failed by a 2-1 margin.