European SME association oppose ‘sin taxes’

The comments from the SME association come days after it was announced that French authorities have approved a new levy on sugar sweetened drinks in the country. The association said it supports its national members in their opposition to additional taxes on foods thought to be ‘unhealthy’.

“UEAPME believes that such taxes should be resisted as there is no evidence they stop people eating the foods, they would be felt most by low income families and positive encouragement towards a healthy diet is much more effective,”​ said the association.

“They do not prevent obesity,”​ it said.

Fat tax​

In the last year legislators across Europe have began to put additional taxes on foods thought to be unhealthy – the so called ‘fat tax’ – in an effort to combat rising obesity levels.

Authorities in Denmark, Hungary, Finland, and France have already introduced a tax on such items, whilst Belgium, Ireland, Romania and Sweden are said to be actively considering a levy.

However, the UEAPME noted that recent research suggests there is very little evidence to support the idea that people may be encouraged to change their eating habits through taxation.

The association argued that taxes are not an appropriate tool to promote healthy eating, and can be seen as no more than an invention to generate additional income for the national budget.

The UEAPME added that selective taxation of certain foods could distort the European market. The association argued that whilst some national authorities have said the measures are justified by European legislation, such legislation does not exist.

Industry opposition​

In addition to SME opposition, many larger industry members have stated their opposition to ‘sin taxes’ – arguing that it is unfair.

Earlier this year Coca-Cola Enterprises said it opposed the proposed French soda tax, and suspended plans for a 17million euro investment in one of its plants in the south of France.

The company said pulling out of the investment was "a symbolic protest against a tax that punishes our company and stigmatises our products."​

“We’re not in favour of this kind of discriminatory tax, and we wish they were not there,” ​explained Coca-Cola Enterprises’ European president Hubert Patricot.