With the changing pace of life, fast food is becoming increasingly popular in some countries. It offers an affordable and accessible solution to hunger. Fast food is causing various medical issues for people like obesity and depression.
To create an entry barrier, one possible solution for the government is to increase taxes on such products. There is a section of the consumer that only consumes fast food because it is cheap. This will act as a deterrent for them and reduce consumption.
I disagree with raising taxes because of three reasons. First, it will only be effective if the taxes levied are considerable. It draws parallels to the raising taxes on oil prices. It is effective only if the alternative becomes affordable in comparison. Also, this solution allows the providers the opportunity to decrease base prices to maintain the prices for consumers.
Second, the makers of fast food can react by lowering the cost of production. Using cheaper ingredients and increased volumes of additives will further make fast food unhealthier. Lastly, the biggest supporters of fast foods are people who eat them for taste. An increase in taxes will have no effect on consumption for these individuals.
This is corroborated by the case study of McDonald’s Chicken McGrill. It was the cheapest burger introduced by McDonald’s in India at a price of Rs. 25. As consumers acquired the taste, the fast-food provider raised its prices to Rs. 45 in only one year. Yet there was no effect on the consumption of the product as it is still their most popular item on the menu. Consequently, in my opinion, raising prices by levying additional taxes by the government will not solve the increasing consumption problem.
With the changing pace of life,
fast
food
is becoming
increasingly
popular in
some
countries. It offers an affordable and accessible solution to hunger.
Fast
food
is causing various medical issues for
people
like obesity and depression.
To create an entry barrier, one possible solution for the
government
is to increase
taxes
on such products. There is a section of the consumer that
only
consumes
fast
food
because
it is
cheap
. This will act as a deterrent for them and
reduce
consumption.
I disagree with raising
taxes
because
of three reasons.
First
, it will
only
be effective if the
taxes
levied are considerable. It draws parallels to the raising
taxes
on oil
prices
. It is effective
only
if the alternative becomes affordable
in comparison
.
Also
, this solution
allows
the providers the opportunity to decrease base
prices
to maintain the
prices
for consumers.
Second, the makers of
fast
food
can react by lowering the cost of production. Using cheaper ingredients and increased volumes of additives will
further
make
fast
food
unhealthier.
Lastly
, the biggest supporters of
fast
foods
are
people
who eat them for taste. An increase in
taxes
will have no effect on consumption for these individuals.
This
is corroborated
by the case study of McDonald’s Chicken
McGrill
. It was the cheapest burger introduced by McDonald’s in India at a
price
of Rs. 25. As consumers acquired the taste, the
fast
-food provider raised its
prices
to Rs. 45 in
only
one year.
Yet
there was no effect on the consumption of the product as it is
still
their most popular item on the menu.
Consequently
, in my opinion, raising
prices
by levying additional
taxes
by the
government
will not solve the increasing consumption problem.