Denmark Discovers the Dangers of Nanny State Food Taxes

Taxes on food inflate food prices, threaten jobs. Imagine that.


As America's dining room Nanny Statists attempt to use the government to force people to eat better, Denmark has discovered there are hefty consequences and are scaling their efforts back. Via the BBC:

The Danish government has said it intends to abolish a tax on foods which are high in saturated fats.

The measure, introduced a little over a year ago, was believed to be the world's first so-called "fat tax." …

Foods containing more than 2.3% saturated fat—including dairy produce, meat and processed foods—were subject to the surcharge.

But authorities said the tax had inflated food prices and put Danish jobs at risk.

It also caused Danes to cross the border and buy their delicious fatty foods in Germany instead.

Because of the bad consequences of the fat tax, Denmark has also decided to cancel a proposed tax on sugar. Somebody let Michael Bloomberg know.

Voters in two cities in California rejected efforts on Election Day to add significant taxes on sodas (Libertarian trigger warning: Huffington Post piece treats voters as slaves to the evil soda lobby and not actual thinking human beings). Voters had good economic reason to reject these bills. American cities are not oases in some vast desert. If soda prices were ridiculous in El Monte, people could just buy their soft drinks (along with the rest of their groceries) in nearby communities. The end result would be that the only people still shopping for food in El Monte would likely be those who couldn't transport themselves to other communities. In other words: poor people. And if the loss of consumers caused El Monte stores to close down? Again, the major impact would be on the poor. They'll pay not just from the loss of consumer choice: Grocery store employees are also notably on the low end of the pay scale.

In New York, Bloomberg's large soda ban has so many exceptions that certain businesses will undoubtedly benefit (convenience stores) while others are harmed (fast food restaurants, movie theaters). What makes Bloomberg's Nanny Statism frustrating is that the market is providing alternatives already. McDonald's is seeing its first monthly sales drop in nine years. Yes, the economy (especially in Europe) gets a significant amount of blame. But competition is playing a role as well. Via The Wall Street Journal:

McDonald's is facing stronger competition from resurgent rivals that had languished for years. Burger King Worldwide Inc., for example, has been rolling out new sandwiches and promoting discounts, and Wendy's Co., too, has been offering coupons, upgrading restaurants and adding fresh menu items.

Also notable, many convenience stores have for years pushed themselves into the cheap, hot, fatty food market. There's no reason to think Bloomberg's large soda ban will make people healthier. It will likely enrich some exempted businesses that sell unhealthy food as fast food restaurants lose business even after having added more healthy options to their menu.