Danone CEO advocates for increased taxes on unhealthy food

James Mayer, CEO of Danone UK and Irish Republic, urges for increased taxes on salty, fatty, and sugary foods due to the insufficient willingness of food producers to make necessary changes.

While primarily recognized for its yogurt brands, the French company Danone also possesses bottled water brands such as Evian and Volvic. According to the CEO, James Mayer, only a small portion, around 10%, of Danone’s products would be impacted by the so-called “sin” taxes.

In remarks initially shared with the Observer newspaper, Mr. Mayer expressed that the UK food industry’s endeavors to enhance the health attributes of its products have not progressed rapidly enough. He emphasized the need for the government to implement “meaningful intervention” at this time.

Mr. Mayer asserts that this is the only method to motivate the entire industry to shift towards healthier and more sustainable products, rather than choosing cheaper options that are detrimental to health.

Despite the significant increase in food prices in the past year, Mr. Mayer acknowledged the challenging timing for advocating higher taxes. However, he suggested that the new approach should encompass advertising limitations and exploring the alignment of VAT rates with the health attributes of products.

Presently, VAT, a form of sales tax, is exempted for the majority of food items. However, alcoholic beverages, confectionery, certain types of crisps and snacks, ice cream, and soft drinks are subject to the standard 20% VAT rate.

Even mineral water, a significant component of Danone’s product range, is subject to VAT. In the past, the food industry has opposed extra taxes, citing potential price increases. However, proponents of the approach argue that tax revenues could be utilized to encourage healthier dietary habits.

According to a spokesperson from the Department of Health and Social Care, the government has already implemented robust measures to address unhealthy foods and remains committed to collaborating closely with the industry.

The spokesperson stated that their sugar reduction program has achieved notable decreases in the sugar content of children’s food, including a 14.9% reduction in breakfast cereals and a 13.5% reduction in yogurts and fromage frais.

Last year, the government implemented restrictions on the placement of unhealthy foods in shops. However, the implementation of new restrictions on “volume” offers, like buy-one-get-one-free, has been postponed until autumn this year.

The implementation of a ban on TV advertising of junk food before 21:00 has been delayed until October 2025 to provide the industry with additional preparation time. Henry Dimbleby, the government’s healthy eating “tsar” and co-founder of the Leon fast-food chain, resigned earlier this year, expressing disappointment over the lack of progress.

The government did not adopt the recommendations from Henry Dimbleby’s report last year, which included proposals for taxes on salt and sugar in processed food. The report also suggested using the tax revenues to supply fresh fruits and vegetables to low-income families.

According to the Food and Drink Federation (FDF), manufacturers are dedicated to enhancing the nutritional value of their products, including through the availability of different portion sizes.

According to the FDF, the average shopping basket now has 13% fewer calories, 15% less sugar, and 24% less salt compared to 2018.

An FDF spokesperson stated that companies remain committed to innovation, acknowledging that it can be a time-consuming process that demands substantial investment and presents technical challenges, particularly depending on the type of food.

The FDF expressed concerns that additional taxes would compound the financial challenges faced by manufacturers due to rising costs. Mr. Mayer stated that Danone UK & Ireland has made a commitment to ensure that 90% of its product range remains below the threshold for high fat, salt, and sugar content. Furthermore, the company has pledged not to introduce any new products targeting children that fall into that category.


Source : bbc.com


By Ryan

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