Denmark’s “Fat Tax” Is No More

Article written by guest writer Kecia Lynn

What’s the Latest Development?

One year after implementing a “fat tax” on foods containing more than 2.3 percent saturated fat, the Danish government has decided to scrap it in response to growing discontent from consumers and businesses. Prices for butter and cheese, among other items, jumped by as much as 9 percent upon passage of the tax, causing Danes to resort to buying lower-quality domestic alternatives or taking their spending cash to Germany and Sweden. One dairy executive said his company lost about €670,000 (about $852,000) in revenue due to the fat tax, and a farmers’ association representative said the tax endangered Danish jobs.

What’s the Big Idea?

This failed attempt to improve a community’s public health via legislation “is a demonstration of how difficult it can be to modify behavior by slapping additional duties on products seen by many as essential staples, especially during tough economic times.” Danes already pay a larger amount of taxes than most in the developed world, and now they will pay more as the government attempts to recoup the estimated $216 million in lost revenue. In what could be seen as a wise move, at the same legislative session lawmakers decided not to implement a planned sugar tax.

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