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Debate about food prices: Greenpeace advocates higher VAT

2021-12-30T20:28:24.076Z

Agriculture minister Özdemir's push towards junk food prices sparked a debate. In addition to social associations and the environmental protection organization Greenpeace, there is also a supermarket chain.



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Poultry fattening in Brandenburg: Consumers should pay more for their meat in the future

Photo: Marius Schwarz / imago images / Marius Schwarz

Federal Agriculture Minister Cem Özdemir's push against junk prices on food has revived a debate about how this idea can be implemented - and how higher prices can actually benefit farmers.

While social associations are already discussing how higher prices can be socially cushioned, Greenpeace, for example, is proposing to even increase VAT on meat, milk and other animal products. "The new federal government should adjust the value added tax for meat and dairy products to the regular rate of 19 percent," said Matthias Lambrecht from Greenpeace to the newspapers of the Funke media group. "In return, it can lower the VAT on fruit and vegetables or eliminate it entirely."

Opposition comes from the co-ruling FDP. Their agricultural expert Gero Hocker said: "Wanting to achieve more animal welfare and climate protection by increasing the value added tax on meat is window dressing." Make the system even more incomprehensible. In addition, there is a great risk that money from additional tax revenues will not reach farmers in the stables in a targeted manner. Clarifications are due in the new year about financing more animal welfare in the stables, including through surcharges in the supermarket.

Lambrecht from Greenpeace argued against this that such changes in VAT would relieve consumers and create incentives for more environmentally friendly and climate-friendly consumption of plant-based foods.

At the same time, farms needed targeted support for better animal husbandry.

Those consumers who buy meat and dairy products should pay for this through a tax or levy.

It is not about telling people what they should eat, but simply about enforcing the polluter pays principle.

Rewe reports demands for higher prices - from industry

The debate about extremely cheap prices, especially for meat, has picked up speed again with the demand of the new Green Agriculture Minister Özdemir. He said there should be "no more junk prices" for food that would ruin farms and prevent more animal welfare. To this end, he is currently examining the introduction of a ban on the sale of groceries below production costs.

He wants to take a look at the market power of the supermarket chains. "The big players are no longer allowed to dictate prices and optimize margins," he told the editorial network in Germany. So far it is unclear how farmers will benefit from such a price floor. The problem here could be that most of the foods offered in supermarkets are industrially processed products.

The retail giant Rewe, for example, is currently facing a wave of price demands from the food industry.

"There have never been so many demands for price increases from the industry as this year," said company boss Lionel Souque of the dpa news agency.

Some of the price increases were justified, but he also said: "There are also manufacturers who just want to ride the price wave."

Further suggestions for higher prices are already on the table

Even under Özdemir's predecessor Julia Klöckner (CDU), several models had already been developed as to how financing could look so that farmers are not left with additional costs for better stables. According to the expert opinion of a commissioned law firm, price surcharges are in principle legally possible for consumers - however, a strict earmarking of the income only for German animal keepers would be problematic.

According to the report, a feasible way would be to increase the VAT rate from a reduced 7 to a full 19 percent for animal products or for all foods. An expert commission from the ministry had favored an "animal welfare tax" - with a conceivable surcharge of 40 cents per kilogram of meat and sausage, two cents per kilo for milk and dairy products, and 15 cents per kilo for cheese and butter. It could be implemented as a consumption tax. According to the feasibility study, this would also be a viable option, as was the case with excise duties on coffee.

In the coalition agreement between the SPD, Greens and FDP there is no specific definition.

A "system supported by market participants" is to be developed in order to use the income to promote running costs and investments for a specific purpose without "burdening the trade with bureaucratic burdens".

FDP expert Hocker said that a "real animal welfare offensive" was needed with the rapid introduction of the agreed, binding and transparent animal welfare label.

"This means that consumers at the shop counter can also take responsibility themselves."

apr / dpa

Source: spiegel

All business articles on 2021-12-30

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