The Danish government says it will abolish the country’s fat tax in January.
A proposed sugar tax meant to be introduced in 2013 has also been scrapped.
In October 2011, Denmark became the first country in the world to introduce a fat tax on meat, dairy products and cooking oil — in order to limit consumers’ intake of fatty foods.
The fat tax hit jobs in Denmark, boosted cross-border trade, and raised food industry administrative costs.
It will be replaced by a tax and competition plan.
The fat tax on food and drinks drove shoppers to neighbouring Germany at an unprecedented level, according to a survey by the Danish Grocers’ Trade Organisation (DSK).
The fat tax increased Danes’ food product purchases at German border shops, and led to heated debate among consumers and the food industry over prices, and the administrative problems which erupted.
Arla, the largest dairy producer in Scandinavia, made its products smaller so that the tax didn’t increase unit prices.
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