EU Parliament majority asks for ‘true pricing food products’ and highest VAT tariff for products like meat

The EU Parliament yesterday told Frans Timmermans vice chair of the EU Commission that his “Green Deal for Food” (Farm to Fork Strategy) is not green enough. Taxes are needed to include environmental costs in food prices (eg give food related GHG emissions a price). Healthy food has to become cheaper with a 0% VAT rate for vegetables and fruit. However meat and sugary drinks should no longer be in a low VAT tariff but go to the normal (high) tariff (in most EU countries this tariff is 20%).  As was expected, yesterday amendment 27 about changing “Food Environment and food Prices” with a VAT tax reform was adopted by a majority of EU Parliament members of the Agriculture and Environment Committee (108 voted yes, 17 no, 3 abstained). See p. 142 https://www.europarl.europa.eu/cmsdata/239271/Results_ENVI-AGRI%20Voting%20Session%20F2F%20(amendments).pdf

This amendment  “Underlines that food prices must send the right signal to consumers; considers that true food prices, reflecting the true cost of production for farmers and also for the environment and society, are the most efficient way to achieve sustainable and equitable food systems in the long term”.

Amendment 27 says the EU parliament “supports giving Member States more flexibility to differentiate in the VAT rates on food with different health and environmental impacts, and enable them to choose a zero VAT tax for healthy and sustainable food products such as fruits and vegetables, as is already implemented in some Member States but not possible for all at this moment1a, and a higher VAT rate on unhealthy food and food that has a high environmental footprint”.

(We all know meat products is a food product with the highest environmental footprint per kg with negative health impacts).

Another amendment 30 about ‘Healthy diets’ was also adopted (112 voted yes, 10 no, 5 abstained). This amendment is asking: “to address the overconsumption of meat and ultra-processed products”.

Tomorrow on Friday, there is the final vote which aims to adopt/reject the Farm to Fork Strategy report (made by the EU parliament) as a whole including the adopted amendments from Thursday (today). The final votes will take place on 10 September from 10.00-11.00. As all compromis amendments were adopted by a large majorities I can predict that the report will be adopted by a large majority during tomorrows’ final vote as well.

Nearly all Christian Democrats (EPE) voted for this amendment 27, and all liberals (RENEW), Social Democrats, Lefts and Greens.

it was already expected by insiders that nearly all political groups in the EU Parliament would vote for amendment 27 for the Farm to Fork Strategy on food prices. The EU Parliament asks for a historical VAT tax reform on food to allow a 0% VAT tariff for sustainable and healthy food and to apply the highest VAT rate on unhealthy food and food that has a high environmental footprint (e.g. processed and red meat, sugary drinks). The Farm to Fork Strategy is the EU Green Deal for Food, proposed 20th May 2020 by Frans Timmermans, vice chair of the EU Commission. The EU Parliament now asks the Commission and Member States to reform the VAT system for food products, to really make sure sustainable and healthy food will be the most affordable option, instead of the most expensive option. A reform of VAT taxes on food products can both help to reduce food related greenhouse gas emissions (30% of all GHG-emissions) and improve healthy diets.

Jeroom Remmers, director of True Animal Protein Price Coalition, a European network of food companies, farmers, youth, health, environmental and animal welfare groups said: “We asked the EU Parliament and the EU Commission to change food prices and include external environmental costs into fiscal systems. We are happy to see this historical support for our proposals in the EU Parliament too! The Commission and EU Member States cannot ignore this message to increase food prices for products like meat and sugar (we eat too much compared to national dietary guidelines) and decrease food prices for vegetables and fruits. European meat price increases can lead to a 3%-reduction of EU GHG-emissions and a 9 billion euro annual cut in European health care costs. Off course, tax reforms on food prices have to be fair for low income groups and farmers too, with compensation payments”.

This is the wording of the part on food prices in compromise amendment 27:

“Underlines that food prices must send the right signal to consumers; considers that true food prices, reflecting the true cost of production for farmers and also for the environment and society, are the most efficient way to achieve sustainable and equitable food systems in the long term (1786, 1751); welcomes, therefore, the strategy’s objective to guide the food industry towards practices that make the healthy and sustainable choice the easy, accessible and (1307, 1780) affordable one for consumers; supports giving Member States more flexibility to differentiate in the VAT rates on food with different health and environmental impacts, and enable them to choose a zero VAT tax for healthy and sustainable food products such as fruits and vegetables, as is already implemented in some Member States but not possible for all at this moment1a, and a higher VAT rate on unhealthy food and food that has a high environmental footprint (1750, 1752, 1914, rapporteur 1793, 1803, / 1846); recalls that household expenditure on food products varies significantly across EU Member States and affordability should be ensured for consumers in all Member States, while also ensuring fair income for primary producers for their sustainable and healthy products (1766, 1767, 1768, 1769, 1772, 1778) and increasing transparency and consumers’ awareness regarding the costs and profits related to each stage of the food supply chain (1751); invites the Commission to launch a study to quantify in economic terms the environmental and societal, including health-related, costs associated with the production and consumption of the most consumed food products on the EU market (1795, 1801, 1805)”.

27th January a consumer enquiry showed a majority of west Europeans support an intelligent meat tax, using its revenues to compensate consumers and farmers. 70% of German, French, Dutch consumers support 0% VAT rate on vegetables and fruits and a higher VAT rate on meat. source: https://www.dvj-insights.com/support-for-meat-tax-study-dvj-insights-tapp-coalition/

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