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October 03, 2021

Denmark adopts world's first-ever 'fat tax'

In this space, we’ve been tracking the idea of the so-called fat tax for years.

1352390_pink_donuts_series Of course, the initiative has been discussed in the public sphere long before, but it was first mentioned to much buzz here in October of 2009, when some 250 commenters chimed in that the suggested tax was either the best or worst cost-cutting proposal they’d heard.

Then, in March of 2010, we rehashed the topic with the soda tax, which was then being tossed around the New York state legislature. That followed by a news story in May of 2011 – this time, an Illinois Republican senator said, “Scrap the fat tax; tax the parents of obese kids, instead.”

So you get it. Controversial idea. Tons of opinions. Though what no one thought during the whole fat tax discussion, over all its variables and all its strategies, was that it’d actually get passed. Which it has.

In Denmark, lawmakers have officially adopted the world’s first-ever fat tax. From the beginning of this month on, Danes will see a price increase in items that are high in saturated fats, from butter to processed meats and everything in between.

*Bing: What countries pay the highest taxes?

According to Time, oils and high-fat dairy products will see the largest price hikes. Under the new regulation, items will be allowed to have 2.3 per cent saturated fat, tax-free. After 2.3 per cent, saturated fat will be taxed at a rate of about $2.90 per kilogram.

So, a pack of butter will cost about 30 per cent more in Denmark now. A bag of chips: eight per cent more. A litre of olive oil, Time notes, will cost about 7.1 per cent more than it did last month.

Interestingly, we’re talking Denmark here, which ain’t exactly the state of Mississippi. Less than 10 per cent of Danes are considered clinically obese, much lower than the European average.

Still, the country has targeted saturated fats – which researchers at Denmark’s Institute of Food and Resource Economics have attributed to the cause of four per cent of the nation’s premature deaths – and it’s because of that that we tend to believe other countries will follow. Yes, even after all the back-and-forth and “No ways!” mentioned in this post’s intro.

After years of debate, where do you stand on the fat tax now that one progressive nation has adopted it? Considering how we fund healthcare in this country, would a fat tax in Canada be a good or bad idea?

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...