The development follows a campaign by trade groups and unions, which claim the fat tax has driven consumers to cross the Danish border and shop in neighbouring nations without the tax, threatening profitability and jobs in Denmark.
Danish union HK Commerce teamed up with the Danish Food & Allied Workers Union (NNF) and the Danish Chamber of Commerce to launch national press advertising campaign last month calling for the taxes to be removed.
A spokesman for HK told FoodNavigator: “It seems the government has listened to our message and that is very positive. Now we have the chance to avoid a tax that would otherwise have been damaging to the industry and our members' jobs. The taxes are bad and we want people to reconsider."
Stumbling block
However, there was a major stumbling block for the trade, he added. “The taxes are part of wider tax reform in Denmark and if they are abolished, the finance will need to be found from elsewhere.”
The minister of taxes and the government have stated that they are prepared to drop the taxes. Left wing politicians and Conservatives have rejected alternative proposals to date, but negotiations continue.
Jorgen Hoppe, president of HK, said: “We will continue the political pressure together with the other organizations. We are urging the parties to come together and find alternative funding in order to avoid the damaging taxes.
"All experiences show that increased taxes only create an increase in people who shop across the border in either Germany, Poland or Sweden. Therefore the taxes help push spending out of the country and the retail and food industries lose jobs.
"At the same time a tax on food hits the lower income groups harder. We don’t believe that these taxes will accomplish any good – there is no evidence that taxes make people eat more healthily, but there is evidence that taxes push commerce across the border. “
The taxes will cost 2,400 Danish jobs
Soren Gade, chief executive of the Danish Agriculture & Food Council, said: “Government’s goal with the tax bill was to create more jobs, but our latest analysis shows that the two taxes together will cost 2,400 Danish jobs. It is tragicomic if you adopt the fees as a majority in parliament is actually against.”
In addition to Venste and the Conservatives, the Liberals and the Danish People’s Party are also understood to be exploring the possibility of rolling back fat taxes and curbing the extended duty on sugar.
The Danish fat tax imposed an extra 16 Kroner per kilogramme of saturated fat on the price of products ranging from butter and milk to pizzas, oils, meats and pre-cooked foods. The proposed sugar tax would introduce a levy on sugar in products ranging from confectionery and yoghurt to pickles and jams.
Some critics of the sugar tax claim it would unfairly hit nutrient-rich products as well as those of poor nutritional value.