- A new report from investor group the FAIRR (Farm Animal Investment Risk & Return) Initiative projects that meat could soon be taxed internationally in the same manner as tobacco, carbon and sugar, according to Bloomberg.
- Lawmakers in Denmark, Germany, China and Sweden have discussed creating livestock-related taxes during the past two years, but so far the proposals have met strong resistance.
- FAIRR has created a plan to "future proof" meat production if these taxes become a reality. The organizations will ask 16 major food companies to diversify their portfolio with plant-based protein options.
First came the tax on tobacco. Then sugar was deemed unhealthy enough to warrant it’s own surcharge. Now, meat could face a similar fate.
Six U.S. cities have adopted sugar taxes, according to data compiled by Bloomberg Intelligence. Philadelphia started charging a 1.5 cent-per-ounce soda tax at the beginning of 2017, and retailers in the city limits say they’re suffering devastating losses. PepsiCo said it would lay off 80 to 100 workers there after sales dropped 40%. In Berkeley, California, a recent study revealed sales of all sugar-sweetened beverages decreased approximately 9.6% during the first year of its penny-per-ounce tax. Cook County, Illinois, which includes Chicago, enacted a tax that went into effect on Aug. 2, but it has since been repealed.
The meat industry doesn’t want to suffer a similar fate.
Governments internationally are considering taxing red meat like beef, pork and lamb. For some countries, it’s an effort to improve public health or help contribute to meeting emissions targets and lowering water use. If new taxes were levied on these products, consumption would no doubt be reduced to some degree. It all comes down to just how severe a tax is added. If consumers could no longer afford some meats, they may turn to turkey or a plant-based option.
For now, there is no sign of a meat tax making its way to the U.S., but it's virtually guaranteed that many Americans wouldn't like it if it did. The U.S. is among the highest per capita consumers of meat, with the average person eating roughly 71 pounds of red meat a year. That’s more than a pound a week.
A growing number of consumers are increasing their consumption of meats made from plants. Animal-based companies have taken notice by investing in plant-protein upstarts. Tyson Foods was the first major meat processor to diversify this way when it acquired a 5% stake in Beyond Meat last fall. Just days ago, Tyson announced it was increasing its ownership with another infusion of funds. And Danone finalized its acquisition of WhiteWave in April of this year, giving the yogurt company a premier position in soy and plant-based products popular with American consumers.
If a red meat tax does go into effect in some cities, states or countries, it would be the latest obstacle for the industry to overcome. It has already faced its fair share of challenges. In 2015, the World Health Organization linked red and processed meats to elevated cancer risks. A year later, many of the studies cited in its report were called into question, but the damage was already done.
The red meat industry may have become emboldened by the trials it has endured. If it can survive a cancer scare, a extra tax may not seem so bad.