The Irish food and drink industry has reportedly rejected government proposals to impose a sugar tax on soft or “fizzy” drinks, calling the tax a “discriminatory” measure that “would have no health benefits and would further hit already hard-pressed Irish consumers.” Commenting on the issue, Food and Drink Industry Ireland (FDII) cited the “fat tax” initiative in Denmark that was reversed this week after authorities found it did not change consumer behavior but instead led to higher inflation and an increase in cross-border shopping.
As FDII Director Paul Kelly explained, “Fiscal measures specifically aimed at altering behavior are complex to design and can be highly unpredictable. Ireland already imposes high taxes on many foods. While most foods are exempt from VAT, the standard rate of 23% applies to confectionary items like sweets, chocolate, crisps, ice-cream and soft drinks. An additional tax on sugar or soft drinks would leave Irish consumers out of pocket, paying one of the highest tax rates in Europe. The impact would be highly regressive, with a disproportionate impact on low-income families that spend a higher proportion of income on food.” See FDII Press Release, November 13, 2012.