Sugar market news june 20 2011, commodity prices

Sugar market news june 20 2011, commodity prices - Hungary "chips tax" to soup up black market, fuel tax evasion: The public health product fee, which was previously dubbed "hamburger tax" and now "chips tax" is to be payable by the business that first starts to market the product in Hungary (it could be the producer itself if it is domestic or the importer is the product is made abroad). The fee will be slapped on products, the sugar, salt or caffeine content of which exceeds the threshold set by law. The products affected are to be soft drinks, energy drinks, sweets, ice creams, ice-lolly, popsicles, salted snacks and food powders.

The OKSZ projects that the consumer price of these products will rise and consequently their sales (calculated in litre, weight or unit) will decline. This is what the very objective of healthy policy should be, it said, adding that the bigger the product fee is, the more dramatic the decrease will be.

The producers will find substitute products that are exempt from the tax, the association forecasts. The levy, however, is to "increase profiteering and tax evasion related to these products" and "Hungarians will buy more (of these products) abroad - especially travellers and those living in border towns".

While the OKSZ believes the product fee will boost budget revenues that may be spent on healthcare purposes, but "by a lot less than what the government hopes." The association does not believe considerable extra revenues could be made by this levy, saying what will be gained on one side, will be lost on the other (e.g. VAT).

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