“Current VAT law makes no sense - the Government charges the full rate of tax on healthy fruit juices and smoothies while effectively encouraging people to buy cakes and frozen pizzas by not taxing them at all. This is about a common sense approach to pricing: we all know that we should be eating more fruit and vegetables and we know that price often plays a big part in deciding which items to buy. So why should we pay a premium for making healthier choices?”
A petition is on the Downing Street website, with Andy Bond, CEO of ASDA, as lead signatory: ASDA VAT PETITION AT DOWNING STREET. ASDA will be contacting MPs, health and nutrition workers and organisations and ASDA consumers amongst others, asking for their support.
Richard Laming, Communications Director, British Soft Drinks Association, said:
“The government rightly wants people to eat more fruit and vegetables because it would be good for their health. They could encourage this by reducing the level of VAT on fruit juice and smoothies, which count towards the 5 a day target. It would be better if tax policy and health policy both pointed in the same direction.”
ASDA estimates that the Treasury currently takes approximately £200m per year from charging 17.5% VAT on fruit juices and smoothies. 100% fruit juices and smoothies can deliver significant health benefits: each serving contributes towards the Government’s target of at least five fruit and vegetable portions a day and mounting evidence shows that an increase in the consumption of fruit and vegetable lowers the risk of chronic diseases such as coronary heart disease and some cancers. Heart disease costs the UK economy £29bn a year in healthcare expenditure and lost productivity.
This campaign follows a series of successful common sense pricing campaigns by ASDA. In 1997, ASDA launched a campaign to stop VAT being charged on tampons and sanitary towels. It cut the cost of its own-brand range by 17.5% and lobbied the Government and European Union ministers to get the tax reduced. In the 2000 Budget, Gordon Brown cut tax on these products from 17.5% to 5%.
May 2008
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