Long-term impact of unhealthy food tax on consumption and the drivers behind: A longitudinal study in Hungary

Abstract

Several countries have introduced public health product taxes with the objective of reducing the absolute amount of consumption of unhealthy food and tackling obesity. This study aims to estimate the long-term impact of the Hungarian public health product tax introduced in 2011.

To achieve this, a unique consumer purchase dataset was analysed to examine daily fast-moving consumer goods purchases from a representative sample of 2,000 households from 2010 to 2018. The results indicate that the tax has been fully reflected in consumer prices. A decline in consumption was observed initially, consistent with previous experiences in Hungary and other countries. However, over time, the data suggests a recovery and even an increase in line with the growth of disposable income. The proportion of taxed products in total fast-moving consumer goods purchases increased from 5.9 % (95 % CI: 5.7 % to 6.0 %) in 2010 to 7.4 % (95 % CI: 7.3 % to 7.6 %) in 2018. Furthermore, the tax has contributed to increased inequality as low-income households spend a higher proportion of their total expenditure on it.

Although taxes on unhealthy foods have proven effective in the short-term, they may not be adequate for reducing overall consumption in the long-term, particularly as disposable income increases. In conclusion, implementing complex interventions is necessary to achieve sustainable positive changes in dietary habits.