Plant-based brands are drawing attention to the disparities in taxes on milk alternatives in Belgium, which have been described as “discriminatory”.
Like cow’s milk, rice and soy milks are exempt from taxes, but other types — such as almond, oat, and pea — are not legally considered to be alternative milk sources. This means they are taxed at a rate of 22 cents for sweetened drinks and 17 cents for unsweetened.
Unexpected bill
One company that has fallen victim to this disparity is Tiptoh, a Belgian pea milk producer. When the company first launched, the founders assumed their product fell within the milk alternative category. However, they then received a bill for €30,000 in excise duties, plus a €10,000 fine.
“I had no idea we had to pay excise taxes,” founder Arnaud Muylaert told De Tijd. “That bill was a very unpleasant surprise. €40,000 is a lot for a company with a turnover of €200,000.”
The company is now worried that it will not survive, after being forced to increase the price of its product to €3 per carton — higher than most other brands on the market. The founders have contacted politicians in an attempt to get the law changed, but while some are sympathetic, little progress has been made so far.
Danone, which owns major alt milk brand Alpro, has also been vocal about the tax disparities, calling for “harmonisation”. In November, the company placed a temporary €2 price cap on its oat and almond milks in Belgium, which reduced retail prices by 20-40%. The aim was to encourage more people to try plant milks, along with making things easier for consumers at time of economic challenges.
Widespread issue
Plant-based milk producers elsewhere in Europe are also facing difficult situations; in the Netherlands, most plant milks have just seen a sharp tax increase from 8.83 to 26.13 cents per litre, as they are grouped in the same category as soft drinks such as Coca-Cola. Soy and pea milk have avoided the rise because they have a comparable protein content to cow’s milk, which is considered a “basic necessity”.
However, the future may be brighter in Germany, where some MPs are calling for taxes on plant milks to be reduced to 7% (equivalent to dairy milk). If successful, this could pave the way for change elsewhere in Europe. ProVeg International is calling for this to be taken even further, with a “0% for the Climate” initiative that would make plant-based foods exempt from VAT.
“Plant milk is not only climate-friendly, but also delicious, varied and versatile – and thus popular with people of all dietary styles,” said Dirk Liebenberg, Senior Project Manager Food Industry & Retail at ProVeg Germany. “Any tax discrimination against plant-based alternatives threatens to slow down the momentum in this promising growth sector.”
