Asda questions VAT on healthy foods
Updated on 14 March 2008
A supermarket has launched a campaign to reduce VAT on fruit juices as it says the tax penalises people for making healthy food choices.
Under current VAT laws there is zero tax on "essential" items including milkshakes, frozen pizza and chips, while the Government charges 17.5% on fruit juice which is classed as a "luxury item".
Launching a petition on the Downing Street website, Sally Hopson, Asda's director of marketing operations, said the "current VAT laws make no sense".
The petition calls on the Government to reduce VAT on 100% fruit juices and smoothies to 5%, the lowest level allowed under EU law.
Ms Hopson said: "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 commonsense 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?"
The campaign has the support of the British Soft Drinks Association (BSDA).
Richard Laming, communications director of the BSA, said: "The Government rightly wants people to eat more fruit and vegetables because it would be good for their health. It would be better if tax policy and health policy both pointed in the same direction."
Asda estimates the Treasury collects about £200 million from VAT on fruit juices and smoothies.
In 1997 the supermarket successfully campaigned for a reduction in VAT levied on tampons and sanitary towels.
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