Tuna tax to boost sardine intake, report says

A working paper from the Center for Agricultural and Rural Development looked at how economic policy could be used to promote high omega-3 fish, such as sardines, over a fish which may contain harmful contaminants such as methylmercury.

The study suggested that a sardine subsidy and a tuna tax would help promote the former while putting people off buying the latter.

The study could fan the flames of debate over regulatory approaches in health policy, which in the past has looked at the effects of taxation or subsidization of products for dealing with obesity by focusing on a fat tax or a thin subsidy.

In the paper Tax, Subsidy, and/or Information for Health: An Example from Fish Consumption , a laboratory test to see how consumers behaved when buying canned sardines or tuna in France was carried out.

Researchers looked at the effects combined with the level of information consumers were given, or already had, on the health benefits or potential risks.

Lead author Stéphan Marette said: " Simulations with the laboratory results show that, for most cases, a per-unit tax on tuna and a per-unit subsidy on sardines without any information revealed to consumers lead to the highest welfare, because both the tax and subsidy directly internalize health characteristics.

The information policy combined with a per-unit tax on tuna and a per-unit subsidy on sardines is socially profitable only if a large proportion of consumers (greater than 95%) receives health information.

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Researchers were prompted to carry out the study as the safety and nutrition of fish consumption have become an increasing public health concern in recent years, they said.

Marette said: " Fish consumption involves a balance between benefits such as omega-3 fatty acids and risks such as methylmercury.

There are large differences among fish species regarding their health-promoting content.

"Information is a classical instrument for emphasizing health benefits and risks, but it is often doomed to failure because of consumers' confusion about different species or their lack of attention to health messages."

The experiment was carried out in Dijon last January with a sample of 120 women randomly selected.

Because pregnancy and breastfeeding status, or being a young child, are crucial indications for risks linked to methylmercury, the study focused on women of childbearing age between 18 and 45.

The full results showed the willingness to pay (WTP) in the lab experiment for canned tuna and canned sardines is statistically significant after the revelation of health information, Marette said.

Information about methylmercury and omega-3 leads to a WTP decrease for tuna and to a WTP increase for sardines.

They also found that if no information was given to consumers or was already known, the tax/subsidy system would still favour the purchasing of sardines.

Marette concluded that: "This paper improves our understanding of how instruments influence consumers' behavior.

"The information policy combined with a tax on tuna and a subsidy on sardines is socially beneficial only if a large proportion of consumers can receive the health information.

"This means that a regulator should target many consumers if information is chosen as a regulatory option."

He added that the "methodology of this paper may be used by administrations, parliaments, or regulatory agencies for forecasting the consequences of their regulatory decisions."

The omega-3 market has seen rapid growth over the last few years.

According to the latest Frost and Sullivan figures the European omega-3 market was worth around €160m (£108m) in 2004 - and is expected to grow at around 8 per cent a year until 2010.