Taxing 'junk food' and CSR

Fat TaxThe recent news about introducing a tax on unhealthy food in the UK has reaching implications if actually implemented. The so-called 'fat tax' on junk food is back on agenda after numerous WHO studies. These studies show that the prices of healthy foods are rising whilst prices of  junk food has remained stable. Researchers at Oxford University and Nottingham University claim that a 17.5% VAT on unhealthy food could save up to 3,200 lives a year. Besides encouraging consumers to purchase healthier foods the tax could be used to subsidize the cost of more expensive, healthy foods.

What are the implications for CSR if this tax is added on? Before I go ahead and open a new can of worms; there is a reason why processed, junk food is cheap - it relies primarily on corn, soybeans and wheat as main ingredients all of which are heavily subsidized both in the US and UK. Production of fresh food like fruit, vegetables, dairy etc is more labour intensive. The food industry not only uses cheap ingredients it also uses economies of scale and often imports ingredients from places with cheap labour.

If the tax is added on, the low-income sector will be hardest hit. It seems unfair to bung them with taxes whilst it was Government subsidies on cheap crops that brought upon the conundrum in the first place. What does this mean for companies that do manufacture junk food but are becoming conscious of the growing health trend?

Frito-Lay and Walkers are two brands who have traditionally manufactured fried potato chips. They both have recently introduced fried potato chips with reduced fat, sodium and calorie content. Sun Chips makes whole grain chips packed in biodegradable bags, no less. Boots' Shapers range includes low calorie chocolate bars, biscuits, chips among other things. Many brands add whole-grain ingredients, have introduced fat-free, low sodium, no sugar etc etc. Weight Watchers is an entire company based on providing healthy microwavable food as well having a low-calorie snack line. Looking through the CSR lens all these products provide consumers healthier options. In half jest, this is a social service for chronic or occasional junk-food eaters that could well qualify as a CSR initiative.

If junk food is being put through the microscope, what of processed food that you usually find in the frozen section?What about fast-food? Why should frozen pizza be cheaper than a bag of apples?  -- these are questions that the Government should answer. Corporate responsibilities of food companies include ethical sourcing, manufacture and marketing, introduction of better quality ingredients, providing nutritional and allergy information, treating their labour well and possibly even creating awareness on healthy eating.

Many companies are doing this - Pepsico bought over Tropicana and Quaker Oats for the very reason of expanding their image as a company that 'cares'  about public health. There are still other companies that are incorporating organic items into their food preparations. Do these not count as CSR activities?

Obesity is a disease that is not only debilitating on physical health but it also takes a toll on mental health and self-esteem apart from national health services. Governments world-over should be ensuring that healthy food items are subsidized, farmers of fresh food are given due importance, public awareness is created especially in schools and companies market their products ethically. Imposing a 'fat-tax' is demeaning, unnecessary and ultimately unfair to those companies who actually are trying to introduce healthy junk food options.

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