Soft-Drink Tax Rejected in Ireland

The Irish food and drink industry has reportedly rejected government proposals
to impose a sugar tax on soft or “fizzy” drinks, calling the tax a “discriminatory”
measure that “would have no health benefits and would further hit already
hard-pressed Irish consumers.” Commenting on the issue, Food and Drink
Industry Ireland (FDII) cited the “fat tax” initiative in Denmark that was reversed
this week after authorities found it did not change consumer behavior but
instead led to higher inflation and an increase in cross-border shopping.

As FDII Director Paul Kelly explained, “Fiscal measures specifically aimed at
altering behavior are complex to design and can be highly unpredictable.
Ireland already imposes high taxes on many foods. While most foods are exempt
from VAT, the standard rate of 23% applies to confectionery items like sweets,
chocolate, crisps, ice-cream and soft drinks. An additional tax on sugar or soft
drinks would leave Irish consumers out of pocket, paying one of the highest tax
rates in Europe. The impact would be highly regressive, with a disproportionate
impact on low-income families that spend a higher proportion of income on
food.” See FDII Press Release, November 13, 2012.