Fast-food tax: 20 pc more expensive food, 36,000 employees laid off

The decision to introduce the fast-food tax could conduct to the rise of food prices by an average of 20 per cent, and also to the lay off of over 36,000 employees, i.e. 20 per cent of the personnel from the food industry, according to the representatives of the employers' associations, Mediafax reports.

Sorin Minea, president of Romalimenta, declared yesterday in a public debate over the introduction of the fast-food tax, that the price of food would rise by an average of over 20 per cent, but the prices of certain products will rise by over 30 per cent.

In his turn, the president of the Food Industry Federation, Dragos Frumosu, added that the introduction of the tax could conduct to the layoff of around 20 per cent of the personnel from the industry, meaning over 36,000 persons.

"The amount that the Ministry of Health wants to cash through this tax is around EUR 1 bln. In 2008, the turnover of the whole food industry was EUR 11.3 bln, while in 2009 it dropped to 10 bln, including wine, beer, mineral water and imports. If we deduct them, the taxable sum would be around EUR 8 bln," Minea said yesterday, in a public debate on the theme of the fast-food tax. He added that the term of fast-food cannot be defined exactly, and the tax will affect the whole food industry. The fast-food tax will be levied starting in March 2010, being set on the companies which produce, import or prepare fast-food products, pastry-confectionery ones, snacks, chips, and non-alcoholic beverages. The amount of the contribution will be established through negotiations with the respective companies.

The tax will be paid by all the legal persons that produce, import or prepare non-recommended food with a high content of salt, fat, sugar, and with food additives. This category will include the fast-food products, the pastry and confectionery products, snacks and chips, and non-alcoholic beverages, except for bottled still mineral water or bottled mineral water, and the fresh natural juices made of fruit and vegetables.

According to Romalimenta president, all the types of cheese, the sour cream, the milk and the butter have a high content of salt, the same as all the products from the meat industry. The high content of sugar is in the canned fruit in syrup, marmalades, honey, and many of the fruit. "The price of food may be distorted artificially in Romania through an idea that the Health Ministry considers innovative. All the taxes mean price rises which will be born by the population," Minea added. Dragos Frumosu also said that the price rises will conduct to a fall of consumption, its effect being the reduction of personnel in the food industry.

"It is desired to turn Romania from a food producing country into an importing country," Frumosu said. In his turn, Sorin Chelmu, deputy secretary general in the Ministry of Agriculture, present at the debate, considers that the new tax could have the effect of raising the prices of food. The full list of the food products considered non-recommended because of the high content of salt, fat, sugar, and with food additives, will be approved through a governmental resolution, according to the draft law which introduces the fast-food tax. The amount of the contribution will be set through negotiations between the Health Ministry and companies.

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