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Restaurants and companies fret over proposed fat tax


A proposal by India’s food regulator to tax all packaged foods with high fat, sugar and salt content isn’t going down well with companies and restaurants.

The Food Safety and Standards Authority of India proposed the tax on Monday. Although a rate hasn’t been specified, it would bring almost all processed food items under the ambit of the proposed levy if implemented. Some companies were skeptical about the move.

“Like cigarettes, consumers who want to consume such products will continue doing it in one form or another,” said BK Rao, deputy marketing manager of Parle Products, which sells biscuits and snacks. “If implemented, prices will shoot up and manufacturers will pass it on to consumers. This might lead to some consumers refraining from the brand. However, when the mandate comes, we will fine tune it (reformulate the product) according to the law,” he added.

The product list includes deep fried Indian and western snacks, desserts and confectioneries that are sweet, fatty and salty, items such as burgers, noodles, sauces, coffee, baby products, sweetened beverages and juices.

“Noodles don’t come under junk food. They have low calorie content with just 1.5 calorie per gram. Everything instant isn’t junk,” said a top official of a company that sells instant noodles. “In other countries, wherever there is this guideline, we are not included.”

The regulator’s notification is based on the recommendations of an 11-member expert group set up by the FSSAI after a Delhi High Court order in 2015. The move is expected to reduce the number of cases of diabetes, hypertension and cardiovascular diseases, especially among children. The regulator also proposed strict labelling norms for such products and a bar on advertising them on children’s television channels.

“We have shared the proposal with the ministry. Specific recommendations will require different ways of implementation, for example, on ban of advertising, consideration from the Ministry of Information & Broadcasting,” said Pawan Agarwal, CEO of FSSAI. “On some matters, we will ourselves take action.”

Restaurants said to make India healthy, consumers must be educated, health products should be subsidised and harmful ingredients should be banned.

“Efficacy of the proposal is the concern. Instead, subsidies should be given to healthy food products,” said Riyaz Amlani, president of the National Restaurant Association of India, which represents chains such as McDonald’s, Pizza Hut, KFC, Cafe Coffee Day, Taco Bell and Subway. “Raising taxes won’t stop consumers from indulgence and the weight of this will fall on organised players. We will express our concerns.”

Fat tax on junk food, a reality in European countries such as Denmark and Hungary, found its way into India in June last year when the Kerala government proposed a 14.5% tax on burgers, pizzas and other junk food served in branded restaurants.

“The proposed tax means that people who have money can afford to be unhealthy,” said Ashish Saxena, CEO of Chili’s American Grill & Bar (south & west). “They should ban the ingredients which are harmful like the US did with trans-fat and Europe with high sodium levels, instead of levying additional tax, which becomes more grey and murky for the industry.”

Not all are complaining about the proposal.

“We fully support FSSAI’s work on promoting safe and nutritious food for Indian consumers,” said an official spokesperson of Hindustan Unilever, which sells products such as Bru coffee and Magnum ice-cream. “We have the responsibility to contribute to this cause both through our product formulation and product labelling to help consumers make informed choices.”

Modern Food Enterprises recently relaunched its bread portfolio with multigrain and multi-vitamin variants. “This is exactly where our relaunch works beautifully as health and wellness was our fundamental brief to our research and development unit six months ago,” said Aseem Soni, CEO of Modern Food.

Source : Economic Times

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