Thursday, 29 December 2011

French 'Cola Tax' Approved: Paris Vows to Fight Deficit and Obesity

SPIEGEL ONLINE INTERNATIONAL: Officially part of the country's tough austerity measures to combat the debt crisis, France will implement a new "soda tax" on Jan. 1. The legislation is also part of a growing trend in Europe to impose sin taxes on food and drinks associated with poor health and obesity.

For French residents fond of sugary drinks like Coca Cola, life is about to get more expensive. The country's top constitutional body, the Constitutional Council, approved a new soda tax on Wednesday. The tax, which works out at about 1 euro cent per container, is part of austerity measures passed in France to combat the debt crisis, and is expected to generate around €120 million ($156 million) in revenue for the government.

In its decision approving the legislation, the Constitutional Council said that while it didn't believe the government was imposing the tax only to promote health and combat obesity, it also didn't see any unfair disadvantages for a specific product group in the legislation.

The "cola tax," as people are calling it in France, will now go into effect on Jan. 1. French media are reporting that most companies will raise the tax money by increasing their price per drink. Industry sources have told newspapers that soft drink prices could increase by as much as 35 percent. » | dsl -- with wires | Thursday, December 29, 2011