Kerala has the second highest levels of obesity in the country, with 24.3 % of its men and 34 % of its women either overweight or obese. Recently the state government of Kerala has announced its plan to impose a 14.5 % “fat tax”. As part of its June 2016 budget, the politicians in God’s own country have proposed the fat tax on burgers, pizzas and other junk food served in branded restaurants. As it remains to be seen whether it is a popularity stunt of the newly elected Marxist government or a genuine health initiative, the larger question is – is the fat tax a successful strategy ?
Denmark was the first country in the world to charge tax on food items that contained saturated fat above a pre-decided level. For the Danes, the tax on saturated fat only led to inflation, cross-border shopping, job losses and huge administrative costs. It had very little effect on the consumption of saturated fat because Danish shoppers downgraded to cheaper brands from budget supermarkets, often in cheaper neighbouring states. Simply, it failed to do what it was supposed to do and so the Danes sensibly got rid of it. The Danish model clearly illustrates that in reality tax has little or no effect on dietary habits, obesity and health of people and the earlier the government of Kerala realises this, the better it can formulate other effective policies to tackle the problem of obesity.
With the rise of “eating out” economy in urban Kerala, many in the service industry were quick to pronounce that the new fat tax was detrimental to consumption. Branded fast food outlets have a relatively small presence in the southern state compared to the north and the west. With only 50-75 outlets of organised fast food restaurant chains in Kerala, including global brands McDonald’s, Burger King, Pizza Hut, Domino’s Pizza and Subway, I doubt it is going to make any significant impact.
Another glaring flaw is the calorie-obesity argument for the fat tax in itself. Why just burgers and fries ?. A lot of local food in wayside eateries are far more fatty and unhealthy. A mere peep in to Kerala´s street food stalls frequented by many and one is convinced of the calorie laden items that is still tax free – take for instance the quintessential saucy beef curry with parotta or the oil sheathed pazham pori, the deep fried parippu vada, or ulli vada or even banana chips. If calorie driven obesity were the real concern, the fat tax should have covered a lot of street foods.
For Kerala, interestingly, it also remains to be seen if the affected fat-foods awaits the fate of liquor – smuggling. Inspite of a recent alcohol ban in Kerala, the “spirited” people of the state found new ways to bring in liquor bottles from the union territory Mahe, without breaking any rules, where it is available cheap. Smuggling alcohol for private use has become so rampant in the state that inspite of the Excise department having a vigil on inter-state luxury buses and parcels, alcohol still finds its way in from as far as Hyderabad. Is cheaper junk foods then from neighbouring states such as Tamilnadu and Karnataka going to be next in line ?
But for the moment, marxist politicians in God’s own country seem to be falling for the temptation of cheap popularity that fat tax offers and have failed to see what the skeptic common-folk have to say.