February 13, 2010

Romania Ponders Possible Junk Food Tax

Romanian government officials are stepping up their game in the fight against obesity with a bid to impose a hefty tax on junk food.

The proposal, still in the works, has triggered a massive amount of flack from the food industry and skepticism about rather it will be effective or not. Despite the negative feedback, the health ministry is not backing down in its attempt to change the eating habits it says have left one in two Romanians overweight.

"We can't just stand around doing nothing," Adrian Streinu-Cercel, Secretary of State of the Health Ministry, told AFP. "We have to re-educate Romanians on how to feed themselves properly." Officials say that obesity has doubled in just two years.

The task will be a daunting one for a country that has had a long tradition of heavy eating. A big setback in the post-communist state is the introduction of fast food. McDonalds is a hugely popular food source there now, and is the top fast food chain in Romania, according to the Euromonitor research firm.

Pros and cons of the proposed tax have been weighed out by debate on several media outlets, such as TV talk shows, newspapers, and press conferences.

Head of the industrial food producers union, Dragos Frumosu, told AFP "Romanians eat badly because they are poor." He added that taxing less-than healthy food will push them to buy and eat even cheaper foods, some of which are "even less healthy and produced in unsanitary conditions."

The tax, slated to begin on March 1st, still needs work. There still is a list of foods that officials must go over and get approval by the government and need to be put to a parliamentary vote before the tax can be mandated.

If the tax bill goes through, it would be the "widest-ranging singular tax of this kind," said Oxford scientist Dushy Clarke, based on health ministry reports. Clarke, a researcher specializing in health-related taxes, said that while "junk food" taxes exist in other places, it is generally revolving around sugary foods and drinks, as in Denmark. Romania is proposing to tax foods high in grease, fat, salt and chemical additives.

"This tax would be the first of its kind to go straight to producers and importers of junk food," Clarke added.

Taiwan is considering a junk food tax as well, slated to take effect in 2011. France talked about a similar tax in 2008, but never put it into action. While most US states do have junk food taxes, they are usually too low to put an impact on consumption. First Lady Michelle Obama put an initiative into effect to raise the awareness of obesity and to offer healthier life choices.

Romanian officials are hoping their tax will raise the equivalent of 1.3 billion dollars a year and help cut down obesity rates, which is driving up the nation's health costs.

In Romania, as elsewhere around the world, the youth are potentially at risk. Though obesity only affects 3.5 percent of children aged three to nine, it is a twofold increase in just four years, according to the health ministry.

The problem is not contested by industry leaders, just the proposed solution. Most businessmen say Romania already has too many taxes, and they are accusing the ministry of launching the bill without first consulting with union leaders, or, at minimum, creating a list of products that are being targeted.

Many feel that the proposed tax is a way to penalize consumers. Mihai Visan, head of Romalimenta, an association of food sector professionals, voiced his concerns, saying after last year's recession any tax increase will only force food producers to raise their prices. He added that prices are already increased by 20 percent.

Experts say that experiments with food taxes have failed in the past. A "sin tax" aimed at making money off alcohol, cost the government nearly 550 million dollars, as many consumers turned to the black market for cheaper booze.