Food tax for better health 

October 26, 2025

A new study from Sweden has shown that rethinking food taxes could save lives, improve public health, and help the planet at the same time. Researchers from Chalmers University of Technology found that if Sweden were to remove value-added tax (VAT) from healthy foods while introducing levies on climate-damaging products, it could prevent about 700 premature deaths every year.

The study, published in Ecological Economics, estimated that such a policy shift could save more than three times the number of people who die in Sweden’s road accidents annually. The researchers said this is a conservative estimate that does not account for the broader burden of diet-related illnesses. “There is also a lot of suffering associated with unhealthy diets that is not apparent in this figure, such as living with obesity or type 2 diabetes,” said Jörgen Larsson, who led the study.

The findings underline a global concern: modern diets are not only harming human health but also contributing to climate change. The researchers noted that in high-income countries, poor diets cause many times more deaths than alcohol consumption and nearly as many as smoking.

The study attributed the potential reduction in deaths mainly to decreases in cancer, especially colorectal cancer, and coronary heart disease, followed by stroke and type 2 diabetes. The researchers argued that taxes and subsidies could be a powerful tool to reshape dietary habits while remaining cost-neutral for consumers.

“Taxes and subsidies are a good way forward,” Larsson said. “Our research also shows that this can be done without the average grocery trip becoming more expensive when selective taxes on certain food groups are compensated by removing VAT on others.”

The research focused on four main food categories: fruits, vegetables and legumes; whole grain products; red and processed meat; and sugar-sweetened beverages. Using data from 22,000 products across 31 supermarkets, the team analysed how price shifts would influence consumer choices.

Their findings suggest that beef and lamb could become 22 to 26 per cent more expensive, leading to a 19 per cent drop in consumption. Sugar-sweetened beverages would see a price rise of 16 to 18 per cent, resulting in a 25 per cent decline in consumption. Meanwhile, fruits and vegetables would become about 10 per cent cheaper, with consumption expected to rise by 4.4 per cent, while whole-grain bread could see a 10 per cent increase in sales.

The researchers also highlighted significant environmental benefits. The proposed reforms could cut Sweden’s food-related carbon footprint by around 700,000 tons of CO2 equivalent—roughly 8 per cent of the country’s passenger car emissions. Additional advantages include reduced use of pesticides and fertilisers and lower ammonia emissions.

For countries like India, which has been debating higher taxes on ultra-processed foods, the study adds weight to the argument that smarter food pricing could deliver both health and climate dividends.