OBESE NATION: It’s time to admit it - Australia is becoming an obese nation. This series looks at how this has happened and more importantly, what we can do to stop the obesity epidemic.
Here Suzie Ferrie explains why a fat tax isn’t enough to deal with the problem while Kathryn Backholer and Anna Peeters look at the relationship between socioeconomic status and weight.
We often hear calls for a junk food tax or “fat tax” when there’s discussion of Australia’s growing obesity problem. The idea behind such a tax is that it would enable governments to subsidise healthy foods so that they’re more affordable, and make unhealthy foods comparatively expensive so people buy less of them.
But would they really? Is cost really the most powerful determinant of what food products people buy?
Let’s consider the likely effects of a junk food tax. Researchers claim that a 20% tax on a can of soft drink would be a sufficient deterrent to purchasing it.
It’s easy to visualise this: someone approaches the refrigerator in a convenience store wanting to buy a drink and ready to make a decision based on taste and cost. If a soft drink is more expensive than low-fat milk or water, it becomes less attractive and we could see a change in buying behaviour – and the attendant reduction in the consumption of obesity-promoting products.
But the junk food tax idea falls over in other situations where food choices are made – when factors other than price come into play. Family dinner options, for instance, are rarely arrayed together in one location for a simple price comparison.
In lower-income areas, where obesity is disproportionately more common, main roads are lined with takeaway food outlets and the only greengrocer may not have a car park (let alone a drive-through service). Part of the attraction of takeaway food is that it provides instant satisfaction while demanding little in the way of (cooking) skills or (nutritional) knowledge.
Dinner options that require food preparation may be out of the question for people living in housing with inadequate cooking and food storage facilities. So, although I can prepare a vegetable and lentil curry with brown rice, followed by apple crumble with real egg custard, for a total of $3.39 per person, in disadvantaged communities this might not compare favourably with the “Five-dollar Meal Deals” offered by various takeaway chains, even if the meals were taxed until they became “Ten-dollar Meal Deals.”
And regardless of the price, it may be hard to sell my healthy $3.39 meal to someone accustomed to takeaway’s addictively sweet and salty and fatty flavours, low in vegetables and high in melt-in-the-mouth starches.
When people claim that healthy food is expensive, they are sometimes simply observing that processed foods labelled “diet” are priced higher, or that high-energy junk foods supply more (unneeded) calories per dollar than vegetables do. Both claims are true, but trivial.
But sometimes they are actually pointing out, correctly, that the real cost of my meal is more than $3.39 – that, unlike the takeaway alternative, this home-cooked dinner cost nearly an hour of my time. An hour that I might not be inclined to spare if I were tired and footsore from a hard low-income job and trying to feed fractious children as soon as possible.
And that my home-cooked meal required a number of different skills and resources I might take for granted, such as cooking ability and a functional kitchen. And that it would cost more than $50 if I had to fund the start-up cost of all the ingredients – the kilogram of flour and the bottle of oil, and so on – instead of just using (and costing) smaller amounts of items I already had.
My $3.39 meal is very nutritious. Unlike the takeaway meal, it provides the full spectrum of essential vitamins and minerals, as well as beneficial fibre and health-protective plant substances, at around 2800kJ per serve. Five-dollar meal deals, on the other hand, typically overfeed, with one meal providing 4300kJ or more (over half of a day’s requirement), as well as less protein and more fat than my version.
Better food labelling might help consumers realise this. But labelling also works best when your options are equally convenient and equally available, sitting side by side for comparison on the supermarket shelf or a food outlet’s menu. When this is not the case, labelling loses much of its power to influence food choices. Just as price manipulation strategies, such as a “fat tax”, do.
Efforts to combat obesity need to look beyond simple pricing strategies, to the underlying knowledge and skills that influence food choices. Just as physical activity is now compulsory at school, basic cooking (real basics, not just biscuits and pizza) should be an integral part of the personal development and life skills curriculum for all kids.
And rather than merely requiring a sink and food preparation area as they do now, building codes need to be updated so that adequate cooking facilities are mandatory in all dwellings. Communal kitchens are another suggestion worth considering.
An emphasis on improving skills means that rather than just punishing poor food choices, we equip people to make better ones - every day at home, not just in the convenience store.
This is part eight of our series Obese Nation. To read the other instalments, follow the links below:
Part one: Mapping Australia’s collective weight gain
Part two: Explainer: overweight, obese, BMI – what does it all mean?
Part three: Explainer: how does excess weight cause disease?
Part four: Recipe for disaster: creating a food supply to suit the appetite
Part five: What’s economic growth got to do with expanding waistlines?
Part six: Preventing weight gain: the dilemma of effective regulation
Part seven: Filling the regulatory gap in chronic disease prevention
Part nine: Education, wealth and the place you live can affect your weight
Part ten: Innovative strategies needed to address Indigenous obesity
Part eleven: Two books, one big issue: Why Calories Count and Weighing In
Part twelve: Putting health at the heart of sustainability policy
Part thirteen: Want to stop the obesity epidemic? Let’s get moving
Part fourteen: Fat of the land: how urban design can help curb obesity
Part fifteen: Industry-sponsored self-regulation: it’s just not cricket
Part sixteen: Regulation and legislation as tools in the battle against obesity
"Food tax" redirects here. For the Soviet tax on food, see Prodnalog.
For the FAT tax for banks, see Financial activity tax.
A fat tax is a tax or surcharge that is placed upon fattening food, beverages or on overweight individuals. It is considered an example of Pigovian taxation. A fat tax aims to discourage unhealthy diets and offset the economic costs of obesity.
A fat tax aims to decrease the consumption of foods that are linked to obesity. A related idea is to tax foods that are linked to increased risk of coronary heart disease. Numerous studies suggest that as the price of a food decreases, individuals get fatter. In fact, eating behavior may be more responsive to price increases than to nutritional education. Estimates suggest that a 1 cent per ounce tax on sugar-sweetened beverages may reduce the consumption of those beverages by 25%. However, there is also evidence that obese individuals are less responsive to changes in the price of food than normal-weight individuals.
To implement a fat tax, it is necessary to specify which food and beverage products will be targeted. This must be done with care, because a carelessly chosen food tax can have surprising and perverse effects. For instance, consumption patterns suggest that taxing saturated fat would induce consumers to increase their salt intake, thereby putting themselves at greater risk for cardiovascular death. Taxation of sodium has been proposed as a way of reducing salt intake and resulting health problems. Current proposals frequently single out sugar-sweetened drinks as a target for taxation. Cross-sectional, prospective, and experimental studies have found an association between obesity and the consumption of sugar-sweetened drinks. However, experimental studies have not always found an association, and the size of the effect can be very modest.
Since the poor spend a greater proportion of their income on food, a fat tax might be regressive. Taxing foods that provide primarily calories, with little other nutritional value reduces this problem, since calories are readily available from many sources in diet of industrialized nations. To make a fat tax less burdensome for the poor, proponents recommend earmarking the revenues to subsidize healthy foods and health education. Additionally, proponents have argued that the fat tax is less regressive to the extent that it lowers medical expenditures and expenditures on the targeted foods among the poor. Indeed, there is a higher incidence of diet-related illnesses among the poor than in the general population.
Unlike placing restrictions on foods or ingredients, a fat tax would not limit consumer choice, only change relative prices.
Benefits of a fat tax
Public health practitioners and scholars in a range of different countries have called for a fat tax on unhealthy foods. The reasoning behind implementing a fat tax is the hope that people will avoid risky dietary behaviours, improving health outcomes in society. Research indicates that the current obesity epidemic is increasing as a result of the fast food industry expanding. Junk food outlets are changing the dietary habits of society, pushing out traditional restaurants and leading to the detrimental health effects of obesity, diabetes and heart disease. Taxes on tobacco have seen smoking rates decrease, and as a result there have been calls for fat taxes to be implemented in more countries in an attempt to reduce the consumption of unhealthy foods.
In 1942, U.S. physiologist A. J. Carlson suggested levying a fee on each pound of overweight, both to counter an "injurious luxury" and to make more food available for the war effort. The concept was reintroduced by Milton Merryweather and P. Franklin Alexander in the late 1970s, but became well known in the early 1980s by Kelly D. Brownell, director of the Rudd Center for Food Policy and Obesity at Yale. Brownell proposed that revenue from junk food taxes be used to subsidize more healthful foods and fund nutrition campaigns.
In a 1994 Op-Ed in the New York Times, Brownell noted that food costs were out of balance, with healthy foods costing more than unhealthy ones. The New York Times Op-Ed piece that proposed the "fat tax" elicited controversy and outrage nationwide. Author Kelly Brownell became the focal point of this controversy, especially from Rush Limbaugh, who spoke out adamantly against the tax and the general principle of governmental intrusion into food choices and a possible invasion of privacy. Brownell’s proposal was listed as number seven on the list of U.S. News & World Report's "16 Smart Ideas to Fix the World." Because of this and other work, Brownell was named by Time Magazine as one of the "World's Most Influential People." In 2000 a paper in the British Medical Journal outlined the potential impact on deaths from ischemic heart disease of a tax on the main sources of saturated fats. In December 2003, The World Health Organization proposed that nations consider taxing junk foods to encourage people to make healthier food choices. According to the WHO report, "Several countries use fiscal measures to promote availability of and access to certain foods; others use taxes to increase or decrease consumption of food; and some use public funds and subsidies to promote access among poor communities to recreational and sporting facilities."
Bruce Silverglade, director of legal affairs for the Center for Science in the Public Interest, said his nonprofit nutrition advocacy organization welcomed the recommendations and has spent years fighting for measures like a Junk Food Tax. The proposal got more traction when New York Assemblyman Felix Ortiz proposed taxes on junk food and entertainment contributing to sedentary lifestyles to fund nutrition and exercise programs. It should also be remembered [weasel words] that taxing foodstuffs is not an argument for increasing taxation. Other taxes can be reduced commensurately if the overall objective is to keep the tax take neutral. The fat tax is an argument for raising taxes on activities that we prefer to discourage (consumption of certain foodstuffs) rather than raising taxes on socially desirable activities. Therefore, opponents of this type of taxation must identify which taxes are preferable to taxing these foodstuffs.[original research?]
Other advocates of the tax, such as Jonathan Gruber point to the effect taxes have had on alcohol and tobacco use. Five studies published between 1981 and 1998 found that drinking declined as the price of alcohol increased. The same holds for tobacco. In California in 1988, Proposition 99 increased the state tax by 25 cents per cigarette pack and allocated a minimum of 20% of revenue to fund anti-tobacco education. From 1988 to 1993, the state saw tobacco use decline by 27%, three times better than the U.S. average.
A CBS News poll from January 2010 reported that a tax on items such as soft drinks and foods considered to be junk food, is opposed 60% to 38%. An even larger number, 72% of Americans, also believed that a tax would not actually help people lose weight. However, the question of whether or not taxation influences diet is an empirical question and not simply a matter of public opinion. While a February 2010 poll by the Quinnipiac University Polling Institute found that New York City residents overwhelmingly favor a soft drink tax, with 76 percent wanting the tax, and 22 percent opposing it. The poll found both Republicans and Democrats favor the tax.
In October 2011, British prime minister David Cameron told reporters that his government might introduce a Fat Tax as part of the solution to Britain's obesity problem.
Japan implemented the 'metabo' law which included the measurement of waist sizes in 2008 in attempt to overcome increasing obesity rates. The New York Times wrote: "To reach its goals of shrinking the overweight population by 10 percent over the next four years and 25 percent over the next seven years, the government will impose financial penalties on companies and local governments that fail to meet specific targets. The country’s Ministry of Health argues that the campaign will keep the spread of diseases like diabetes and strokes in check." The 'metabo' law involved conducting an annual waist measurement check of people aged between 40 and 75, which was administered by employers and local government. The role of employers and local government was to ensure there was a minimum of 65% participation, with a goal to decrease Japan's obesity rates by 25% by 2015 and failure to meet these goals results in a fine.
In October 2011, Denmark introduced a fat tax on butter, milk, cheese, pizza, meat, oil and processed food if the item contains more than 2.3% saturated fat. However, in November 2012, the Danish Tax Ministry announced it would abolish the fat tax, stating that it failed to change Danes' eating habits, had encouraged cross border trading, put Danish jobs at risk and had been a bureaucratic nightmare for producers and outlets. The failure of Denmark's fat tax was also due to financial reasons, with politicians identifying the fat tax as a funding source for the government, rather than a health initiative that attempted to improve the health outcomes of society. The proposed sugar tax plans were also scrapped.
Mette Gjerskov, the Danish minister of food, agriculture and fisheries, stated that "the fat tax is one of the most criticized we had in a long time. Now we have to try to improve public health by other means.” Although the tax resulted in an additional $216 million in revenue, it also led to numerous complaints from Danish retailers that their customers were taking their business to other countries, such as Sweden and Germany, to take advantage of their lower prices.
In the Indian state of Kerala which is ruled by CPI(M), as a part of June 2016 budgets, the government proposed a 14.5 per cent 'fat tax' on burgers, pizzas and other junk food served in branded restaurants which officials from the quick service industry termed as 'detrimental' to consumption. Industry estimates suggest there are 50-75 outlets of organised fast-food restaurant chains in Kerala, including global brands McDonald's, Chicking, Burger King, Pizza Hut, Domino's Pizza and Subway. Kerala is the first state in India to introduce a "fat tax" on burgers, pizzas, doughnuts and tacos served in branded restaurants.
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