Regional opposition brews up against Spanish ‘sugar’ tax

The regions which are the biggest producers of fruit juices argue that legislation is misleading

Last month, Spanish authorities announced that they will raise the VAT on soft drinks, juices and nectars which contain added sugar or sweeteners from 10% to 21%. The argument that has been put forward in defence of this measure was the drive to bring about healthier habits in consumption among the population and to bring some additional money to the coffers to be used for palliating the effects of the COVID-19 crisis.

The decision, however, has stirred considerable controversy in the Iberian country from consumer groups and soft drinks manufacturers. The latest challenge to the new tax comes from the autonomous regions of Murcia, Valencia and Andalusia, whose authorities have protested in a letter to the national Ministry of Consumption that the proposed legislation completely misses the mark and will be harmful to local economies.

Even well-intentioned steps can be controversial

The agricultural ministers from the three Mediterranean regions have decided to present a unified front against the VAT tax with the claim that the legislation is misleading right from its inception and that it shows poor understanding and an unfair targeting of that particular manufacturing sector.

The text of the letter has emphasized that “unsweetened juices and nectars, by definition and by law, cannot contain added sugar or sweeteners of any kind. They can only be 100 percent fruit or 100 percent fruit and vegetables, as clearly indicated on the labeling".

The authorities also defend the regional producers with the argument that technology of production has been regularly upgraded in the past two decades in order to ensure precision and that what is written on the labels effectively corresponds to European regulations.

The Government of Murcia had also co-signed another letter sent to various Ministries in the national government by representatives of agricultural unions and producers which states that the VAT increase is bound to have a negative long-term impact on the rural economy there.

Agriculture is still an important sector in the South of Spain and particularly in Murcia where it is considered to be the main employer in the countryside and, as a consequence, the main obstacle to rural exodus and depopulation.