Taiwan's unhealthy food tax

Taiwan may become the first country to impose "unhealthy food tax," to discourage consumption of junk food. Taiwan's Bureau of Health Promotion says it is drafting a bill that will tax unhealthy food including canned beverages, fast food, biscuits, cakes, alcoholic products, confectionery etc. The revenue raised will be invested in health promotion campaigns. It plans to introduce the bill next year. The finance minister has already said he would support the bill.

The bureau says it will begin by targeting the packaged food which is easier to monitor and control. The bureau officials believe some of the top health problems in Taiwan such as cancer, diabetes, heart conditions and obesity can be tackled by changing food habits of people.

It's estimated that 30 percent children in Taiwan are obese, a trend blamed on the growing habit of eating junk food, largely sold by western multinational companies.

Health activists have long targeted multinational fast food chains and packaged food manufactures for dishing out unhealthy high calorie food which is fast becoming popular in Asia. Some companies have responded by introducing low-calorie variants of their popular products or by introducing labels that mention the calories in the product. But their actions have varied from country to country, depending on the intensity of regulatory or stakeholder pressures.

If Taiwan succeeds in passing the bill to tax junk food, similar demand can erupt in other countries. A copy cat regulation in other countries could spell a big trouble for food and beverages companies.

There could be serious legal implications of such legislation for companies. Once a particular food product, for example a certain burger, gets legally classified as unhealthy to slap a tax, the company can potentially be dragged to court by existing and past consumers seeking compensation for alleged health damage.

I wrote a feature in Ethical Corporation magazine's Nov 2008 issue on junk food marketing in Asia after a report from UK pressure group Consumers International, published in September 2008, claimed that multinational brands were taking advantage of lax laws in Asian countries to promote calorie-dense and nutrition-poor foods to children.

The Ethical Corporation magazine feature concluded that "fast-food brands in Asia face the quandary of having to meet the rising demands of non-governmental organisations to address healthy-eating concerns, while catering to Asian customers’ known preferences for salty, spicy and oily food. Companies will be more inclined to offer healthier choices,and market them, when more customers demand these options. For now at least, Asian customers seem less aware of the adverse health effects of a high intake of salt, sugar and fat than activists feel they should be."

Taiwan's intended regulation aims to educate consumers using the tax proceeds. If consumers get the message right and start shunning junk food, companies will be forced to offer healthy alternatives.