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A study from Chalmers University suggests that implementing a food tax shift could save 700 lives annually in Sweden.
It shows that removing VAT from healthy foods and taxing climate-harming food can prevent fatalities by reducing diseases like cancer and heart disease.
The approach, which also offers climate benefits, could be applicable to other high-income countries facing similar dietary health issues.
In January this year, India’s Economic Survey noted that introducing a higher tax rate for ultra-processed foods (UPF) could curb their excessive consumption. Now a study led by researchers from Chalmers University of Technology in Sweden has analysed the potential effects of a food tax shift — where value added tax (VAT) is removed from healthy foods and levies are introduced on foods that have a negative impact on the climate.
The study, published in Ecological Economies, showed that owing to this shift, 700 fewer people in Sweden under the age of 70 would die prematurely each year. This is more than three times the number of road traffic deaths in the country annually (200).
“This high figure surprised us, and yet it is a conservative estimate. There is also a lot of suffering associated with unhealthy diets that is not apparent in this figure, such as living with obesity or type 2 diabetes,” said Jörgen Larsson, researcher at Chalmers University of Technology, who led the study.
While the study was based in Sweden, the researchers said that results were relevant for most high-income countries where unhealthy diets cause many times more deaths annually than high levels of alcohol consumption, and about as many deaths as smoking.
The reductions in deaths were primarily attributed to decreases in cancer (mainly colorectal cancer) and coronary heart disease, followed by reductions in stroke and type 2 diabetes.
“Today’s diets are making us sick and negatively impacting the climate. If we want to do something about this collectively, taxes and subsidies are a good way forward. Our research also shows that this can be done without the average trip to the supermarket for groceries becoming more expensive when selective taxes on certain food groups are compensated by removing VAT on other food groups,” he said.
The research focused on four food groups:
• Fruits, vegetables, legumes
• Whole grain products
• Beef, lamb, pork and processed meat
• Sugar-sweetened beverages
Its calculations, which were based on current VAT levels in Sweden, confirmed that price changes have a big impact on what consumers buy.
To analyse price sensitivity and changes in consumption, the researchers from Chalmers University of Technology, Karolinska Institutet, and the Swedish University of Agricultural Sciences, followed and used sales data for 22,000 products from 31 supermarkets in Sweden.
The analysis, called Cost-neutral food tax reforms for healthier and more sustainable diets found that with such cost-neutral approach, beef and lamb would be 22-26 per cent more expensive. This would lead to an estimated consumption reduction of 19 per cent.
Similarly, estimated sugar-sweetened beverages would be 16-18 per cent more expensive, with an estimated consumption reduction of a huge 25 per cent.
On the other hand, fruit and vegetables would be 10.7 per cent cheaper, resulting in an estimated increase in consumption of 4.4 per cent; while whole grain bread would be 10.7 per cent cheaper, meaning an estimated increase in consumption of 10 per cent.
Further, such tax reforms could reduce Sweden's food carbon footprint by approximately 700,000 tons of CO2e, equivalent to an 8 per cent reduction in passenger car emissions, alongside co-benefits such as decreased pesticide and fertiliser use and lower ammonia emissions.