- Sweden will reduce the VAT on food from 12% to 6% in April 2026, introducing tiered rates to promote healthy eating and tax processed foods more. Retailers like ICA and Coop may see increased demand for healthy products, while processed food producers could face challenges. The reform may face political backlash due to its regressive impact on low-income households and potential “health leakage” from cross-border exports. Investors have mixed opportunities, with potential retail margin boosts from simplified VAT compliance, but inflationary risks and consumer resistance remain concerns. The VAT cut is unlikely to cause significant inflation due to the current low inflation environment. The reform could shift consumer spending towards healthier foods, benefiting retailers but challenging processed food producers.
Source: ainvest.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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