Could taxes on foods high in fat, sugar and salt (HFSS) improve climate health and nutrition in Scotland?

Funding This paper derives from work under Topics B4 (Food supply and security) and B5 (Food and Drink Improvement), which are part of the Scottish Government—Rural and Environment Science and Analytical Services Division (RESAS) as part of their Strategic Research Programme 2022-27.Peer reviewedPublisher PD

Could taxes on foods high in fat, sugar and salt (HFSS) improve climate health and nutrition in Scotland?

Foods high in fats, sugar and salt (HFSS) have a significant impact on public health, the climate and the economy. As such, it is critical to ascertain how pricing policies could help reduce their consumption in Scotland. This study analysed secondary data of 3,260 households from Kantar Worldpanel, which comprised 18 food categories consumed in Scotland. The primary objective was to simulate the implications of an excise tax imposed on HFSS food purchases on climate health and consumer welfare using uncompensated own- and cross-price elasticities estimated from the Exact Affine Stone Index demand model. Two policy scenarios were considered: taxing all HFSS while the prices of the remaining foods remain unchanged; and taxing HFSS while subsidising fruit and vegetables with the revenue generated. The results from the study indicate that imposing taxes on HFSS would reduce their consumption due to price effects. A10% tax on HFSS food groups while subsidising fruit and vegetables with the tax revenues simultaneously brought about a 5-9% decline in the consumption of HFFS and an 11% and 7% rise in vegetable and fruit consumption respectively. Weekly per capita greenhouse gas emissions could increase by 2% if fruit and vegetables were subsidised with the tax revenues, while decreasing by 3% when only HFSS food groups were taxed. Taxing HFSS without a subsidy policy in place was more regressive on consumers than when fruit and vegetables were subsidised. In conclusion, imposing a revenue-neutral HFSS tax policy would result in a trade22 off between dietary, welfare and environmental goals. The policy scenario adopted by the 23 government would depend on the national goal being pursued

Could Foods High in Fat, Sugar and Salt (HFSS) Taxes Improve Climate Health and Nutrition in Scotland?

Foods high in fats, sugar and salt (HFSS) have huge impact on public health, climate health, and the economy. As such, it is critical to ascertain how pricing policies could help reduce their consumption in Scotland. This study analysed a secondary data of 3,260 households from Kantar Worldpanel which comprised of eighteen food categories consumed in Scotland. The primary objective is to simulate the implications of an excise tax imposed on HFSS on food purchases, climate health and consumer welfare using uncompensated own and cross price elasticities estimated from the Exact Affine Stone Index demand model. Two policy scenarios were considered: taxing all HFSS whilst the prices of the remaining foods remained unchanged; and taxing HFSS whilst subsidizing fruit and vegetables with the revenue generated. Results from the study indicate that imposing taxes on HFSS would reduce their consumption due to price effects. Also, a 10 percent tax on HFSS food groups while subsidising fruits and vegetables with the tax revenues simultaneously brought about a 5-9 percent decline in the consumption of HFFS and an 11 percent and 7 percent rise in vegetables and fruits consumption, respectively. Weekly per capita greenhouse gas emission could increase by 2 percent when fruits and vegetables are subsidised with the tax revenues rather than decrease by 3 percent when only HFSS food groups are taxed. Taxing HFSS without any subsidy policy in place was more regressive on consumers than when fruits and vegetables are subsidized. In conclusion, imposing a revenue-neutral HFSS tax policy would result in a trade-off between dietary, welfare and environmental goals. The policy scenario adopted by government would depend on the national goal being pursued