THE "SODA" TAX-HUNGARIAN INITIATIVE AGAINST UNHEALTHY FOODS

Taxing the "bad" foods heavily to discourage their consumption is increasingly being considered by many governments across the world, worried about the debilitating effect they have on the health of the consumers at large. While such taxation measures can bring in lot of money to the government, there is still no unanimity as to how this is additional revenue should be spent. The options include utilization of this fund for cross subsidizing "good" foods such as fruits and vegetables or spending on the health care system that is facing money crunch in keeping them alive, let alone expand. The economic slow down world over is making it difficult for many families, especially from the low income group to have adequate health coverage and buy "good" foods. Most recent example of a courageous government imposing higher taxes on unhealthy food products made by the industry which can antagonize the citizens, comes from Hungary and it is worth waiting to watch the impact of such a policy on the health of the population.

"In its Open Letter, EPHA considers that the impact of fiscal measures applied to food policy can be significant, when combined with health promotion measures designed to increase awareness of the health issues associated with a poor diet. In addition, EPHA would recommend that the Hungarian government consider using other pricing mechanisms or subsidies to make the healthy options of fruit, vegetables, wholegrain cereals and pulses more widely available and affordable. An increase of 250 forints (0.9 euros) will apply per litre of sodas. The tax on biscuits and snacks will be double (from 100 to 200 forints) According to the Hungarian government, the tax would raise around 30 billion forints (111 million euro), to be used to fund the national healthcare system that has been strongly affected by the economic crisis. While high level organisations such as the World Health Organization (WHO), the Food and Agriculture Organization (FAO)and the Organisation for Economic Cooperation and Development (OECD) are increasingly discussing the use of taxation as a mean to influence people's consumption, the issue is still controversial in many countries. EPHA hopes that this will lead other countries in Europe to take positive action to tackle this issue".

As this policy is still in its infancy, it is difficult to predict how many countries will eventually adopt this route to discourage people from eating more foods with high sugar and fat levels. If one goes by the past experience of using pricing as a means of curbing consumption, such measures are unlikely to make much of an impact on consumption. Take the case of Tobacco or Liquor which costs dearly to those who indulge in these products and it is hard to maintain that such fiscal measures have deterred many consumers from smoking or liquor consumption. But it is an undeniable fact that smoking has definitely seen a downward trend while alcohol products still hold their sway. The consoling factor is that the governments get increasing revenue which can be used for the welfare of the people.

V.H.POTTY
http://vhpotty.blogspot.com/
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