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Jörgen Larsson, researcher at Chalmers University of Technology, Sweden

Credit: Chalmers University of Technology | Sara Larsson

Although steak might become pricier and tomatoes more affordable, the overall cost for everyday groceries could remain steady. A new in-depth study from Chalmers University of Technology in Sweden has explored the potential outcomes of rearranging food taxes. The model suggests removing VAT on health-promoting foods while adding fees to foods that significantly contribute to climate change. This adjustment could not only promote environmental sustainability but also improve public health—potentially preventing 700 premature deaths annually in Sweden.

In affluent nations, poor dietary habits are a leading cause of disease and early death. Across Western Europe, unhealthy diets lead to significantly more deaths than alcohol misuse, and nearly as many as smoking. Additionally, our food choices have a major impact on the environment. In Sweden, emissions from food consumption are about double those originating from passenger car usage.

Current measures primarily focus on issuing nutritional advice. However, the European Commission’s own advisory group recommends applying financial incentives to influence diet. This new study investigates how to apply such a system in practice through a food tax shift. Although centered on Sweden, the study's insights are broadly relevant to other wealthier countries. The research was conducted by experts from Chalmers University, Karolinska Institutet, and the Swedish University of Agricultural Sciences.

"Our diet is harming both our health and the planet. If we want collective change, using taxes and subsidies strategically is a viable path," says Jörgen Larsson, who led the research project. "We’ve shown that this can be accomplished without raising the overall cost of grocery shopping, provided VAT is removed from some goods while specific items get taxed."

Lower Health Risks and Fewer Deaths

In this model, VAT would be lifted from foods recommended by major health studies, such as those from the EAT Lancet report. Simultaneously, taxes would be applied to foods with high climate impacts.

The researchers found that such a tax change could reduce deaths among people under 70 by approximately 700 each year—over triple the number killed in road traffic incidents annually in Sweden.

"We didn’t expect such a high figure, and it's conservative. Issues like living with obesity or type 2 diabetes aren’t even reflected in the number," says Larsson.

This policy could also lower Sweden’s climate-related food emissions by around 700,000 tons of CO₂ equivalents annually—equivalent to removing nearly one in ten passenger cars from the roads.

The study grouped food into four key categories:

• Fruits, vegetables, and legumes
• Whole grain products
• Beef, lamb, pork, and processed meats
• Sugar-sweetened beverages

The researchers selected these groups based on strong data about their health and environmental impacts. Cutting back on red meats would help the environment, while encouraging plant-based and whole foods improves public health. Under the plan, VAT would be removed from plant-based and whole-grain foods, while an extra tax would apply to sweetened drinks and red or processed meats.

"Prices definitely influence consumer behavior," says Larsson. "For example, beef consumption in Sweden jumped 50% in the 1990s after prices dropped significantly following EU membership."

Prices Drive Choices

Using Sweden’s current VAT levels, the study shows price changes would strongly affect purchasing habits. Removing VAT from healthy foods would lower their price by about 11%, leading to a 10% rise in whole-grain consumption and a 4% increase in fruit and vegetable intake. Conversely, a tax on sugary drinks would raise prices by 17%, potentially cutting consumption by 25%.

The biggest shift would be in red meat. Prices could go up by about 25%, or nearly 3 euros per kilo, leading to a 19% drop in consumption.

"Even though this feels like a large increase, it simply brings meat consumption back to 1990s levels," Larsson says. "No one needs to completely give up meat—cutting back modestly makes a big difference."

Neutral Impact on Budget Across Income Levels

Food price increases particularly affect low-income earners, who spend a bigger portion of their income on essentials. But since some items would become cheaper, the policy could balance out. This cost-neutral aspect may help garner public support.

"Because the overall government spending wouldn’t rise, and we’d gain public health improvements and lower healthcare costs, the tax shift is feasible and attractive in the long term," says Larsson.

Sources: Global Burden of Disease (2021), Swedish Environmental Protection Agency, and SLU Future Food

Additional Study Information:

The research article titled “Cost-Neutral Food Tax Reforms for Healthier and More Sustainable Diets” appears in Ecological Economics, with contributions from researchers at Chalmers University, Karolinska Institutet, and the Swedish University of Agricultural Sciences. The project is part of the Mistra Sustainable Consumption program.

On November 26, 2025, the program will host a closing conference during Black Week, where findings from this study will be highlighted.

Earlier Related Publications:

• Public and political acceptability of a food tax shift, published in Food Policy, Jan 2025
• Understanding opposition to a meat tax in Sweden, published in Environmental Research: Food Systems, 2025

Research Details:

• Sales data from 22,000 products in 31 Swedish supermarkets over two years were analysed.
• Focused on four key food groups: fruit and vegetables, whole grains, red and processed meat, and sugary drinks.
• Used recognized nutritional and environmental assessment tools, including the WHO’s Diet Impact Assessment model and SLU’s SAFAD model.

Sample Outcomes from the Study:

• Beef and lamb: Prices up by 22–26% (~3 Euros/kg). Estimated consumption drop: 19%
• Sugar-sweetened drinks: Prices up by 16–18% (~0.3 Euros/litre). Expected consumption drop: ~25%
• Fruit and vegetables: Prices down by 10.7%. Estimated consumption rise: 4.4%
• Whole grain bread: Prices down by 10.7%. Estimated consumption increase: 10%

Journal

Ecological Economics

DOI

10.1016/j.ecolecon.2025.108822

Method of Research

Case study

Subject of Research

Not applicable

Article Title

Cost-Neutral Food Tax Reforms for Healthier and More Sustainable Diets

Article Publication Date

October 15, 2025

COI Statement

All authors confirm that they have no financial or personal conflicts of interest that could influence the research.