Danes May Bring Back Butter As Government Rolls Back 'Fat Tax'
Toothbutter: noun. Butter spread so thickly as to reveal teeth marks upon biting.
The fact that this word exists in the Danish language should help to explain what politicians were up against when they introduced the "fat tax" just over a year ago. This is a country that loves it some butter (and meat, and all things dreadful to the arteries).
The goal of reducing waistlines and increasing life expectancy may have been laudable, but the previous administration's decision to charge consumers 16 kroner (about $2.75) per kilogram of saturated fat in order to achieve that goal was much maligned from the get-go.
Social advocates said it would unfairly affect the poor and worsen their health by sending them toward more caloric, lower quality food. Business leaders said it would cost Danish jobs as consumers scampered across the border to Germany to stock up on groceries. Danish butchers sued, saying the tax violated European Union trade rules. Some consumers accused supermarkets of using the tax as a screen to inch prices even higher. Other skeptical residents saw it as just one more way for the government to line its coffers.
This cacophony of dissent meant no one was particularly surprised this weekend when the government announced that the fat tax would be abolished as part of the 2013 budget agreement. In the same breath, the administration also put the brakes on a "sugar tax," which had yet to take effect.
As you can imagine, the world is watching. As The Washington Post notes, the timing of the repeal is interesting, given other, fatter countries' efforts to regulate what people eat in an effort to save us from our most unhealthy habits. (Ahem, New York and other cities' trans fats ban, New York's soda size limit, and the U.S. government's calorie labeling requirement.)
In its explanation of the move, the Danish Tax Ministry cited several of the aforementioned criticisms ("lining the coffers" excepted). A few public officials have also recently been quoted as saying they don't believe it's possible for a country to tax its way to health. But in general, while there's been plenty of discussion about the economic ramifications of the fat tax, it's more difficult to find any hard-nosed assessment of whether it worked. Did it needle any butter-hungry Danes into cutting back?
The answer just might be yes. Just as the government was announcing its decision to abolish the tax, the newspaper Information printed a story about an as-yet unpublished study by the Institute of Food and Resource Economics at Copenhagen University. According to the institute's report, Danes' consumption of butter, margarine and oil did, in fact, fall by 10-20 percent in the three months after the fat tax went into effect, as compared with the same time the year before. But it's unclear whether the credit should go to the law or the poor economy.
Shopper Gundi Halfmann says she has changed her ways. "If you're even just a little bit price-wise," she says, "you notice the difference. I haven't bought liver pate for a long time. It used to be 15 kroner, and now it can be all the way up to 30. It's crazy."
Halfmann says she's skeptical, though, that supermarkets will actually lower prices once the tax comes off the books. "Maybe a little bit at first, but then they'll go up again."
Meanwhile, Denmark's food minister is reportedly asking major grocery chains to promise that they will lower prices.
Welcome back, toothbutter.
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