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As #COVID-19 drives action on obesity, could 'soda taxes' work for food?

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In both the UK and France, a number of parliamentarians are pushing for new taxes on certain food products, building on the example of existing soda taxes which charge levies for drinks with high sugar content. Advocates of the policies want governments to leverage their influence over pricing and address Europeans’ expanding waistlines via their wallets.

Indeed, across the EU, nutritional experts and public health officials are seeking new ways of promoting healthier eating habits, including the introduction of junk food advertising restrictions and fruit and vegetable subsidies. Public opinion seems to be in favour of an interventionist approach: 71% of Britons support subsidising healthy foods and almost half (45%) are in favour of taxing unhealthy ones. Similar trends have been observed across Europe.

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While these ideas seem on the surface to make straightforward logical sense, they bring with them a far thornier set of questions. How will European governments actually determine which foods are healthy and which are unhealthy? Which products will they tax, and which ones will they subsidise?

Tackling obesity head-on

It’s little surprise the British government is now ramping up plans to tackle the obesity epidemic. In 2015, 57% of the UK populace was overweight, with the World Health Organisation predicting that percentage will reach 69% by 2030; one in 10 British children are obese before they even begin their schooling. The coronavirus pandemic has further underlined the dangers of unhealthy eating. 8% of British COVID sufferers are morbidly obese, despite a mere 2.9% of the population falling into this weight classification.

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The Prime Minister himself has personal experience with the dangers of this particular comorbidity. Boris Johnson was admitted to intensive care with coronavirus symptoms earlier this year, and while he remains clinically obese, his attitudes towards tackling the problem have clearly changed. In addition to shedding 14 lbs, Johnson has performed an about-turn on his views on food legislation, after previously dubbing levies on unhealthy products “sin stealth taxes” that were symptomatic of a “creeping nanny state”.

Johnson now advocates tighter regulation of junk food marketing and clearer calorie counts on restaurant menu items, while campaigners urge him to consider subsidising healthier options. A report from non-profit thinktank Demos found almost 20 million people in the UK cannot afford to eat healthier produce, while recent research indicates subsidising healthier foodstuffs would be more effective in fighting obesity than taxing unhealthier ones.

France appears to be following a similar course of action. A senatorial report released in late May received cross-party approval and could be enshrined in French law in the near future. Alongside detailed analysis of France’s deteriorating diets, the report contains 20 concrete proposals for solving the crisis. One of those proposals involves taxing unhealthy food products, which the study’s authors state should be defined in accordance with France’s Nutri-Score front of pack (FOP) labelling system – one of the candidates currently being considered by the European Commission for use across the European Union.

The battle of the FOP labels

While the recently unveiled Farm 2 Fork (F2F) strategy sets out a process for adopting a uniform FOP system across the entire EU, the Commission has thus far refrained from endorsing any one candidate. The debate over labels could have a drastic impact on how individual member states answer these key questions, not least because it is bringing the complexities of defining what constitutes a balanced diet into sharp focus.

The Nutri-Score FOP system operates upon a colour-coded sliding scale, with foods perceived to have the highest nutritional value graded “A” and shaded dark green, while those with the poorest content are given an “E” certification and marked red. Proponents argue Nutri-Score quickly and clearly demonstrates nutritional data to customers and helps them to make informed decisions. The system has already been adopted on a voluntary basis by countries including Belgium, Luxembourg, and of course France.

However, the system has numerous detractors. Most vocal among these is Italy, which argues that many of the country’s signature food products (including its famous olive oils and its cured meats) are penalised by Nutri-Score, even though the country’s traditional Mediterranean diet is lauded as one of the healthiest in the world.

As an alternative, Italy has proposed its own Nutrinform FOP label, which does not categorise foods as ‘good’ or ‘bad’ but rather presents nutritional information in the form of a charging battery infographic. Nutrinform was approved by the European Commission (EC) for commercial use just this month, while agriculture ministers from other southern EU countries, including Romania and Greece, have spoken out in favour of the Italian position.

France itself seems to have noticed the potential repercussions of Nutri-Score when it comes to the country’s most important culinary products – and especially its cheeses. By the French government’s own admission, the Nutri-Score algorithm for calculating grades has been “adapted” when it comes to products like cheese and butter, lest the system undermine the appeal of French dairy products.

That special treatment has not satisfied all of Nutri-Score’s French critics, however, with figures like French senator Jean Bizet warning of potential “negative effects” on the dairy sector. Nutri-Score’s real-world effectiveness in influencing consumer decisions has also been questioned, with researchers finding the FOP label only improved the “nutritional quality” of the foods consumers ultimately bought by 2.5%.

The heated nature of this debate helps explain why the Commission is struggling to standardise FOP labelling across European shelves. It also reflects the deep levels of disagreement over what constitutes a balanced, healthy diet, both between and within individual EU member states. Before legislators or regulators in London, Paris, or other European capitals can make concrete policy decisions on taxing or subsidising particular foods, they will need to find satisfactory answers to the questions that will invariably surround their chosen criteria.

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HERA: First step towards the establishment of EU FAB, a network of ever-warm production capacities

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The Commission has published the Prior Information Notice, which provides vaccine and therapeutics manufacturers with preliminary information about the EU FAB call for competition, planned for early 2022. The objective of EU FAB is to create a network of ‘ever-warm' production capacities for vaccine and medicine manufacturing that can be activated in case of future crises. EU FAB will cover multiple vaccine and therapeutic technologies. To be operational at all times, the participating production sites are expected to ensure availability of qualified staff, clear operational processes and quality controls, allowing the EU to be better prepared and respond to future health threats. EU FAB will be able to quickly and easily activate its network of manufacturing capacities to meet demand for vaccines and/or therapeutics needs, until the market has scaled up production capacities. EU FAB will form a key component of the industrial dimension of the European Health Emergency Preparedness and Response Authority (HERA), as announced in the Communication Introducing HERA, the next step towards completing the European Health Union, on 16 September. The Prior Information Notice on the EU FAB is available here.

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Commission approves €1.8 million Latvian scheme to support cattle farmers affected by the coronavirus outbreak

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The European Commission has approved a €1.8 million Latvian scheme to support farmers active in the cattle-breeding sector affected by the coronavirus outbreak. The scheme was approved under the State Aid Temporary Framework. Under the scheme, the aid will take the form of direct grants. The measure aims at mitigating the liquidity shortages that the beneficiaries are facing and at addressing part of the losses they incurred due to the coronavirus outbreak and the restrictive measures that the Latvian government had to implement to limit the spread of the virus. The Commission found that the scheme is in line with the conditions of the Temporary Framework.

In particular, the aid (i) will not exceed €225,000 per beneficiary; and (ii) will be granted no later than 31 December 2021. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the scheme under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.64541 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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Commission approves €500,000 Portuguese scheme to further support the passenger transport sector in Azores in the context of the coronavirus outbreak

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The European Commission has approved a €500,000 Portuguese scheme to further support the passenger transport sector in the Region of the Azores in the context of the coronavirus outbreak. The measure was approved under the State Aid Temporary Framework. It follows another Portuguese scheme to support the passenger transport sector in Azores that the Commission approved on 4 June 2021 (SA.63010). Under the new scheme, the aid will take the form of direct grants. The measure will be open to collective passenger transport companies of all sizes active in the Azores. The purpose of the measure is to mitigate the sudden liquidity shortages that these companies are facing and to address losses incurred over 2021 due to the coronavirus outbreak and the restrictive measures that the government had to implement to limit the spread of the virus.

The Commission found that the Portuguese scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid (i) will not exceed €1.8 million per company; and (ii) will be granted no later than 31 December 2021. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions of the Temporary Framework. On this basis, the Commission approved the measure under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.64599 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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