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France’s proposed new sugar tax could transform the biggest food companies—will the consumer pay the price?

FREE Cape Cod News by FREE Cape Cod News
December 2, 2024
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While the French are known for their culinary expertise, more people are consuming sugary foods and drinks, and the government is worried that the nation is transforming itself from cheese connoisseurs into snackers of cheesy bites, moving from a country of artisanal draft ale lovers into consumers of sweet bottled beer.

The best example of this trend towards processed food is that of McDonald’s. In 1979, the fast food giant opened its first restaurant in Strasbourg and then strategically spread to all the big cities and, later, to all shopping centers, railways, and motorway service stations to reach as many consumers as possible. France is now the most significant market after the U.S., with 1,707 branches nationwide.

Le Monde cites the pressures of the past few years as another growth factor; the French are desperate to eat more for pleasure, to stem the anxiety felt over the past few years from COVID-19, the Ukraine war, political instability, and food inflation. The nation wants to snack its way to feeling better, and manufacturers are producing more and more fast food snacks that are increasingly calorific.

Last year, the big winners, according to NielsenIQ, were Heineken’s Desperados Tropical beer (rum and passion fruit flavor), Kinder chocolate ice cream, and Kinder Tronky wafers.

Likewise, in the past year, Krispy Kreme has launched 20 outlets across Paris and made $15 million, marketing donuts as the new croissants, tying in with major cultural touchpoints, selling Barbie, Harry Potter, and Halloween versions.

In the fight against obesity and the need to raise revenue for a seriously impoverished economy, one policy idea is to tax these sugary, highly processed products.

Nutritional taxes are gaining favor

The WHO currently recommends that countries use nutritional taxing to combat the increase in chronic diseases like diabetes and obesity, and many institutions like the World Bank are also arguing the same.

The Institut Montaigne, a liberal think tank, plus the CEOs of Coopérative U, BEL (Babybel, Laughing Cow), and Sodexo, recently advocated to raise VAT to 20% for very sweet products, compared to the current 5.5% or 10%.

Or, to help one in five obese adults in France, they suggested that the government could levy a tax on products that don’t meet sugar levels as agreed upon by government ministries. They’re thinking specifically of sweets, chocolate, biscuits, breakfast cereals, spreads

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Tags: businesseconomy

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