Tax codes in 12 EU countries put plant-based food at a price disadvantage

An advocacy report finds 12 of 27 EU states tax at least one plant-based food above its animal equivalent, and none tax plant-based lower in direct pairs.

A report from the European Vegetarian Union finds that 12 of the 27 EU member states charge a higher VAT rate on at least one plant-based food than on its animal counterpart. The analysis covers 33 product categories: 15 direct plant/animal pairs plus six traditional plant proteins. In none of the 15 direct pairs does any member state tax the plant-based item lower. The one case of a vegan product taxed below an animal protein is Spain, where dry pulses carry 4% against 10% on fresh meat.

The gaps can be large. Plant-based milk is taxed higher in eight countries. Hungary has the biggest absolute gap, 27% on plant-based milk and meat and fish alternatives against 5% on animal versions. Italy has the biggest relative gap, 22% on non-dairy milk versus 4% on cow's milk. Croatia charges 25% on several plant proteins against 5%, and Portugal 23% on meat and seafood analogues against 6%. By the report's calculation, VAT alone makes plant-based products 21% pricier in Hungary, 19% in Croatia, 17.3% in Italy, 16% in Portugal and 2.9% in Poland. Fifteen states apply uniform rates across all surveyed categories. Latvia has temporarily cut VAT on milk, poultry, bread and eggs to 12% until the end of June 2027, without covering plant-based alternatives.

For sustenance, this matters because tax is one of the few price levers a government controls directly. Alternative proteins need to get cheaper to become a default food, and a built-in tax penalty works against that. The report says the 2022 VAT Directive reform already allows equal treatment, so these gaps come from national classification choices and could be changed without new EU law. It cites retail examples: plant-based meat volume up 16.8% in France as prices fell, 30% growth in six months at Lidl Germany after price parity, and a 47% rise in discounted private-label lines at Billa Austria.

Caveats: the European Vegetarian Union is an advocacy body that favours equal treatment. Its poll found 51.5% of parties support equal VAT and 16.7% oppose, but the sample is not described. The sales gains come from retailers and Circana data, and are not shown to be caused by price alone.

Source: Green Queen