‘Fat Taxes’ in Europe and Beyond – A Legal and Policy Analysis Under EU and WTO Law

Abstract

At a time in which food taxes are causing controversy throughout Europe and discussed across the world, this article provides an analysis of the genesis, rationale, scientific evidence and legal implications stemming from the introduction of such fiscal schemes. By taking as a case study the recently implemented (and soon-withdrawn) Danish fiscal scheme, it discusses the compatibility of these product-specific taxes under both EU law and WTO law. Given the increasing number of Member States considering adopting such measures and the references to 'fiscale measures' contained in the recently-adopted WHO NCD Global Action Plan 2013-2020, it also examines the legality of a hypothetical EU-wide fat tax scheme within the framework of the EU’s Obesity Prevention Strategy and other EU-related strategies. Although fat taxes present raise several serious flaws in addressing the ‘obesity epidemic,’ the tobacco experience suggests that the use of fiscal policies to affect the price of products may be effective. However, this it is true only insofar as they are part of an overall strategy based on a mix of policy tools. Unfortunately neither the EU nor the Member States have yet shown enough political will and creativity as to develop the sort of credible EU obesity prevention strategy needed to experiment bold policies such as fat taxes.

Keywords: Fiscal Measures, Lifestyle Risk Regulation, Lifestyle Risk, Non Communicable diseases, EU Law, WTO Law, Paternalism, Theories of Justice, Nudge

JEL Classification: I18, K23, K32, K33, K34, K42, L51, L66