9. Taxing unhealthy foods to improve health in Hungary



In 2011, facing a lack of health funding and deteriorating population health, the Hungarian health secretary introduced a tax on unhealthy food and drink to improve health, generate revenue and encourage food manufacturers to reformulate products.





Three national dietary surveys are conducted in Hungary.,


Hungary unsuccessfully pushes food industry on reformulation.


Public health product tax is introduced in Hungary.


First evaluation of the public health product tax is published.


Second evaluation of the public health product tax is published.


Hungary adopts legislation to ban trans fats in food processing.


Hungary adopts legislation to improve nutritional standards in public catering and improve the nutritional quality of school meals.


Although Hungary is a high-income country, income inequality and relative poverty rates have increased since 2007 and a third of Hungarians are classed as materially deprived., Hungary has poor health compared with other EU countries and substantial health inequalities. For example, in 2014, its death rate from cardiovascular disease was more than double the EU average. Hungary has one of the highest obesity rates in the EU and obesity is significantly higher among people on low incomes than among wealthier people.

The intervention

Three national dietary surveys between 1985 and 2004 demonstrated the Hungarian population was exposed to substantial dietary risks. For example, Hungarians had the highest sucrose intake in the EU and one of the highest salt consumptions, at 12.5g per person per day. These findings led to Hungary’s 2004 National Nutrition Policy Framework, which included actions to improve the energy and nutrient content of foods. The health sector engaged with the food industry to encourage voluntary reformulation of products, but with limited success.

The public health product tax

In 2011, the Hungarian health minister faced two issues: pressure from the finance ministry to raise health spending (especially to increase doctors’ salaries) and worsening population health. His solution was to introduce a tax on unhealthy food and drink. The aim was threefold:

  • to create sustainable revenue for health spending
  • to promote healthier eating habits among Hungarians
  • to encourage manufacturers to reformulate products to reduce their salt, sugar and caffeine content.

A variety of data was used to develop the tax, including population estimates of obesity and other diet-related conditions, population dietary surveys, and analysis of the nutritional composition of the foods contributing to poor diets. The minister convened a working group with the National Institute for Health Development, the National Institute for Food and Nutrition Science, the Ministry of Finance and the WHO to analyse these data and formulate a robust, evidence-based rationale for the products the tax would target.

The food industry strongly opposed the tax and appealed to the European Commission to block it on the grounds that it discriminated against international food products. Forced to respond, the health secretary successfully demonstrated that the tax was proportionate and non-discriminatory. He also had the support of the medical profession, health NGOs and teachers, who saw a direct link between unhealthy diets and poor outcomes.

The Hungarian parliament passed legislation in July 2011, and two months later the tax was introduced. The tax takes the form of an excise levy applied on the salt, sugar and caffeine content of pre-packaged foods for which there are healthy alternatives. Taxed products include sugar-sweetened beverages, energy drinks, confectionery, salted snacks, condiments, stock cubes, flavoured alcohol and jam.

After the tax was introduced, prices of the targeted products rose by an average of 29%. The health secretary and the wider public health community defended the tax in the media and ran several campaigns, arguing that the foods affected were not essential to health or diet.


In 2012, the National Institute for Health Development conducted an impact evaluation to identify changes in consumption and attitudes among the population, changes in tax revenues and the economic impact of the tax on producers and manufacturers.

Two years later, the National Institute for Food and Nutrition Science conducted another impact evaluation to assess whether the reduced consumption had been sustained, whether consumption had changed in low-income population groups and among groups with diet-related health risks, and the economic consequences of the tax.

The main findings from the two evaluations were:,

  • Consumption of taxed products fell, mainly due to higher prices but also because the tax raised awareness that certain products were unhealthy. By 2012, sales of taxable products had fallen by an average of 27%. Consumers either consumed less of the products or replaced them with a cheaper (often healthier) product, another brand of the same product, or a different food altogether. The second evaluation suggested that this reduction was sustained.
  • Consumption of taxed products fell more among people in lower socioeconomic groups (measured by education level) than among people of higher socioeconomic status.
  • Adults who were overweight and obese were more likely to reduce their consumption of taxable products than those who were a healthy weight or underweight.
  • In the year following the new tax, approximately four in 10 manufacturers of taxable food and drink reformulated their products to reduce or eliminate unhealthy ingredients, thereby reducing the availability of unhealthy products.
  • In the first four years, the tax generated HUF61.3bn (about US$219m) for health spending. This facilitated a pay rise for 95,000 health workers. This, in combination with other policies, contributed to growth in the health workforce and fewer doctors leaving Hungary to find better-paid work.


In December 2015, the Hungarian parliament adopted a bill to amend the public health product tax. From 1 January 2016, companies subject to the public health product tax were able to deduct up to 10% of their tax liability to finance health promotion programmes such as activities aimed at promoting a healthy diet and lifestyle or participation in sports. The Act was amended again in 2017 to allow companies to donate part of their tax liability (capped at 10%) to a health care provider, to fund health promotion activities.

Lessons learned

What worked well

  • The government showed strong leadership, standing by its proposals for the public health product tax. It faced down a challenge from the European Commission and garnered support from the health sector to counter the negative media coverage fuelled by the food industry.
  • The tax was developed using good baseline data, including longitudinal data on consumption of different foods and detailed research into the composition of products. This enabled the tax to be applied to a well-defined set of products, targeted for their unequivocally negative health impact, and offered strong justification for the intervention.
  • The government has committed to continuous monitoring of the impact of the tax on consumer behaviour, the food industry’s behaviour, and on the economy over time. This rigour is rare, and the WHO Regional Office for Europe has provided financial support to share the findings internationally.
  • The legislation was far more effective than voluntary industry initiatives that had preceded it. Following the success of the tax, the government introduced two further food industry regulations: one restricting trans fats and the other regulating the products available in public canteens.

What worked less well

  • The industry is always one step ahead and, since its inception, the government has had to revise the tax five times to close loopholes that allowed manufacturers to replace taxed ingredients with unhealthy but tax-exempt alternatives.
  • Although the tax was successful, the government was advised to implement additional activities to increase its impact. These included introducing price subsidies for healthy foods, such as fruits and vegetables, and using targeted communications and educational programmes to further encourage behaviour change.

Implications for the UK

Introducing food and drink taxes in the UK may be a more effective way of improving diet-related health and reducing health inequalities than voluntary industry initiatives. This case study offers some valuable insights into how to successfully introduce a food and drink tax.

There is a need for broad political support. Successful implementation in Hungary was largely down to the absolute parliamentary majority of the party that favoured taxation, which meant the bill passed almost unchallenged. In the UK, where government majorities are much slimmer, it would take significant cross-party working to achieve a parliamentary consensus for a controversial initiative such as a food product tax.

There is also a need for public support. Studies suggest the public is more supportive of health taxes when they are earmarked for specific health activities. This may be a way to make a new tax acceptable to people in the UK.

It is important to establish a robust evidence base. The Hungarian public health product tax was underpinned by strong data about consumer behaviour and analysis into the composition of processed foods and drinks, combined with evidence about the impact of different nutrients on health. This detail proved invaluable in countering the arguments of the food industry and persuading the European Commission that the tax was proportionate.

Continued monitoring is essential. Ingredient-based taxes create an incentive for producers to reformulate products. However, food manufacturers will adopt a variety of tactics to avoid paying taxes, so governments need to constantly monitor the formulation of targeted products and spot and close legislative loopholes. Equally, positive reformulation should be recognised and championed.

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