Romanian Fast Food Tax To Lead To Higher Prices, MNC Withdrawal – Food Industry Official

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Frumosu criticized the fact that the decision has already been drafted and the Government wants talks with social partners "now, in the 12th hour."

Frumosu believes the tax will only worsen the state of the health system and will negatively impact the consumer. Prices will be higher and sales lower, small enterprises will close down and multinational companies will move to other countries, leading to a rise in unemployment, the union leader said.

Romanian Health Minister Attila Cseke announced Tuesday that the ministry plans to introduce a tax on fast food, similar to the sin tax (levied on alcohol and tobacco), in order to support national health programs.

He said he has asked the ministry's health commission to issue a stand on this proposal. The minister said he will hold talks with fast food producers and distributors about the manner in which the tax will be collected.

The tax will be levied starting March 2010 on economic operators that produce or import fast food, pastry, cakes, snacks, chips and fizzy drinks, and the quantum of the tax will be established after negotiations with the respective operators.

The tax will be paid by all legal entities that produce or import food with a high level of salt, fats, sugar and additives, and fast food, pastry, cakes, snacks, chips and fizzy drinks are included in this category of unhealthy food. Mineral water and natural juice obtained from fruit or vegetables will be exempt from this tax.

The list of unhealthy foods will be approved by a Government decision according to the draft law introducing the tax on fast food. The level of the tax will be established after talks between the Health Ministry and companies producing or importing unhealthy food. The money collected will be used to finance health expenses and will go to the Health Ministry's budget starting March 1, 2010.