A food tax shift could save lives – without a price hike in the average shopping basket

More expensive steak, cheaper tomatoes, but the same total cost for the average basket of groceries at the supermarket. A comprehensive study, led by researchers from Chalmers University of Technology in Sweden has analysed the potential effects of a food tax shift – where VAT is removed from healthy foods and levies are introduced on foods that have a negative impact on the climate. The study shows that a shift in taxes could have both environmental and human health benefits, and means that 700 fewer people in Sweden would die prematurely each year.

Today, diet in many high-income countries is a leading risk factor for certain diseases and premature death. In Western Europe, unhealthy diets cause many times more deaths annually than high levels of alcohol consumption, and about as many deaths as smoking.* Furthermore, what we eat also has a very negative impacts on the climate. In Sweden, the negative impact on the climate from food consumption is roughly twice that of the direct emissions from all Swedish passenger car traffic.**

Current policy initiatives mainly rely on providing dietary guidelines. The European Commission’s own advisory body “Science Advice for Policy by European Academies” (SAPEA) has recommended the use of economic incentives to encourage healthier diets. This new study analysed how such incentives could be implemented in practice using a food tax shift, and what effects a reform of this kind might have. The case examined was Sweden, but, according to the researchers, the results are relevant for most high-income countries. The study was carried out by researchers from Chalmers University of Technology, Karolinska Institutet, and the Swedish University of Agricultural Sciences.

“Today’s diets are making us sick and negatively impacting the climate. If we want to do something about this collectively, taxes and subsidies are a good way forward. Our research also shows that this can be done without the average trip to the supermarket for groceries becoming more expensive when selective taxes on certain food groups are compensated by removing VAT on other food groups,” says Jörgen Larsson, researcher at Chalmers University of Technology, who led the recently published study.

Reduces premature deaths and disease

With a food tax shift, VAT would be removed from some foods that we should eat more of according to e.g. the recently released EAT Lancet report. The effects of imposing levies on certain foods that have a big impact on the climate were also calculated.

The study shows that the changes in diet that a food tax shift is anticipated to lead to can prevent about 700 deaths annually among people under 70 in Sweden. This can be compared with the figure of around 200 road traffic deaths in Sweden annually.

“This high figure surprised us, and yet it is a conservative estimate. 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,” he says.

The food tax shift would also reduce the climate footprint of Swedes’ food consumption by about 700,000 tonnes of carbon dioxide equivalents per year. This is equivalent to an 8 per cent reduction in emissions from all passenger cars – or nearly one in ten cars disappearing from Sweden’s roads.

The study focused on four food groups:

• Fruits, vegetables, legumes
• Whole grain products
• Beef, lamb, pork and processed meat
• Sugar-sweetened beverages

The researchers focused on foods with robust scientific evidence for their effects on health or the climate, where reduced consumption of beef and lamb would benefit the climate, while other measures would mainly have health-promoting effects. VAT would therefore be removed for fruit, vegetables, legumes and whole grain products, and levies introduced on sugar-sweetened beverages, beef, lamb, pork and processed meat.

“That the price of food affects the level of consumption is well known. A historical example is beef consumption, which increased by 50 per cent in Sweden during the 1990s, largely attributable to the price of beef almost halving after Sweden’s entry into the EU,” he says.

Price makes a big difference for consumption
The study’s calculations were based on current VAT levels in Sweden, and confirm that price changes have a big impact on what consumers put in their shopping trolleys. The removal of VAT would reduce the price level of these products by almost 11 per cent, leading to an increase in consumption of, for example, 10 per cent for whole grain bread and 4 per cent for fruit and vegetables. The levy on sugar-sweetened beverages would increase the price by around 17 per cent, which the researchers estimated would reduce consumption by about a quarter. 

The biggest difference for Swedish consumers would be in the prices of beef and lamb, where the tax shift would mean a price increase of around 25 per cent, or almost 3 euros per kilo. This is estimated to reduce meat consumption by 19 per cent.

“While it might seem to be a big price increase, it would also lead to a decrease in meat consumption in Sweden by one-fifth – thus returning meat consumption to the same level as in the 1990s. Not everyone needs to become vegetarian for the sake of the climate, but with more moderate consumption, a lot stands to be gained,” he says.

Cost-neutral for both low- and high-income earners
Increases in the price of food usually hit low-income earners harder because this group spends a larger proportion of their income on food. But with the proposed tax shift, some foods would be more expensive and others cheaper, something the researchers see as an advantage for gaining public acceptance for the change.

“That the reform is also cost-neutral for central government also improves the chances of its implementation. In the long term, a food tax shift would benefit central government economically through better public health, reduced sick leave, and lower costs for health care,” he says.

*Source: Global Burden of Disease, 2021

**Source: Swedish Environmental Protection Agency and SLU Future Food (both in Swedish only)

More about the research:

The article Cost-Neutral Food Tax Reforms for Healthier and More Sustainable Diets has been published in the scientific journal Ecological Economics. The authors are Jörgen Larsson, Liselotte Schäfer Elinder, Jonas Nässén, Edvin Månsson, Elin Röös, Sarah Säll, Emma Ejelöv and Emma Patterson. These researchers are active at Chalmers University of Technology, Karolinska Institutet, and the Swedish University of Agricultural Sciences, all in Sweden.

The study was carried out within the framework of the research programme Mistra Sustainable Consumption.

During Black Week, on November 26, 2025, the Mistra Sustainable Consumption research programme will hold its final conference, featuring a presentation on the food tax shift study.

Previous publications on food tax shift within the framework of the research programme:

Journal article: Public and political acceptability of a food tax shift – An experiment with policy framing and revenue use, published in Food Policy, January 2025.

Journal article: Understanding opposition: arguments for and against a meat tax in Sweden and their effect on policy attitudes. Published in Environmental Research: Food Systems, 2025

More information about the research, including a recorded webinar (in Swedish), can be found at www.matskatteväxling.se

More details from the study

• To analyse price sensitivity and changes in consumption, the researchers used sales data for 22,000 products from 31 supermarkets in Sweden, which they followed for two years.
• Four food groups were selected: Fruit and vegetables, whole grain products, beef, pork, lamb and processed meat, and sugar-sweetened beverages.
• The researchers used the Nordic Nutritional Recommendations, Livsmedelsverkets generella kostråd för den vuxna befolkningen 2025 (dietary guidelines for adults, which may soon be available in English), the Global Burden of Disease, 2021 study, the WHO tool Diet Impact Assessment model, and the Swedish University of Agricultural Sciences tool SAFAD, which stands for Sustainability Assessment of Foods and Diets, for measures of the climate impact of different foods.

Examples of price differences and calculated health and climate benefits with a food tax shift in Sweden

• Beef and lamb would be 22–26 per cent more expensive, corresponding to an increase of 3 Euros per kilo. Estimated consumption reduction: 19 per cent.

• Sugar-sweetened beverages would be 16–18 per cent more expensive, meaning an increase of around 0.3 Euros per litre. Estimated consumption reduction: around 25 per cent.
• Fruit and vegetables would be 10.7 per cent cheaper, resulting in an estimated increase in consumption of 4.4 per cent.
• Whole grain bread would be 10.7 per cent cheaper, meaning an estimated increase in consumption of 10 per cent.