Denmark Imposes Tax Increase on Unhealthy Foods

A Lastest News about Food , Beverages and Tobacco in Denmark

Posted on: 12 Jan 2012

As part of the Danish government’s aim of improving the health of the Danish population, the government is planning to increase the excise duties on tobacco and unhealthy foods from January 1, 2012.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 12/20/2011 GAIN Report Number: DK1106 Denmark Post: Stockholm Denmark Imposes Tax Increase on Unhealthy Foods Report Categories: Trade Policy Monitoring Approved By: Mary Ellen Smith Prepared By: Asa Wideback Report Highlights: As part of the Danish government’s aim of improving the health of the Danish population, the government is planning to increase the excise duties on tobacco and unhealthy foods from January 1, 2012. General Information: Background In accordance with the Danish Tax Reform 2010, the Danish government has proposed to increase the excise duties on tobacco, chocolate and sugar products, ice-cream, soft drinks, beer and wine. There are two duty levels on sugar, the lowest applies to products containing less than 0.5% added sugar and the highest on products containing more than 0.5%. While duties on tobacco and alcohol have been in place for many years in Denmark, the duties on confectionary and soft drinks were imposed 2008-2010. In addition, a tax on saturated fat was imposed in Denmark in October 2011. The aim with these health related taxes is to reduce health risks of consuming unhealthy food. The increased duties on unhealthy foods, beer and wine are proposed to be imposed on January 1, 2012. The date for tobacco set at April 1, 2012. Please see examples of duty rates in the table below. Product Old Duty (DKK) New Duty (DKK) Chocolate and candy* 17.75 per kg 23.75 per kg Ice-cream* 4.25 per liter 6.38 per liter Soft drink* 1.08 per liter 1.58 per liter Tobacco 1.04 per cigarette 1.16 per cigarette Beer and wine 50.88 per liter pure alcohol 63.60 per liter pure alcohol *Added sugar content more than 0.5%. Source: The Danish Ministry of Taxation 1USD equals 5.5 DKK The processors and importers pay the tax. The expected extra cost for Danish food producers and importers is about DKK 1 billion (USD 180 million) per year, of which DKK 350 million stem from the chocolate duty, 75 million from ice-cream, 100 million from soft drinks and 475 million from beer and wine. Implications on Trade As mentioned above, these duties have been in place for some years already and will probably have minor effects on exports of the affected products to Denmark. It is the importer who pays the duty but the cost will indirectly be paid by the consumers. Denmark’s decision to increase these duties has no practical implications for exporters of these products to Denmark, other than that they will need to account for them when setting the price. The expected price increase is about 3.5% for chocolate, 5% for beer, 9% for wine, 10% for licorice and 2% for soft drinks.
Posted: 12 January 2012

See more from Food , Beverages and Tobacco in Denmark

Expert Views    
Dairy and Products Semi-annual   By Foreign Agricultural Service
Food and Agricultural Import Regulations and Standards   By Foreign Agricultural Service
Dairy and Products Semi-annual 2012   By Foreign Agricultural Service
Dairy and Products Annual 2012   By Foreign Agricultural Service
Proposed Abolishment of Dietic Food Concept   By Foreign Agricultural Service