Subsidising fresh fruit and vegetables would increase the amount consumers eat by as much as 15% and cost the government £2.5 billion per year, according to a study from the University of Warwick.
The research found that fixed costs in the supply chain increase the price of fruit and vegetables by at least 40%; significantly higher than for other foods.
Fruit and vegetables need to be restocked more frequently, which means they have particularly high fixed costs and drives up the price. These higher prices lead to consumers buying around 15% less fruit and vegetables – which the report says accounts for a third of the gap between what is consumed and the recommended intake.
The report argues for a fruit and vegetable subsidy as high as 25% to help reduce the cost and in doing so, improve diets by increasing consumption of fruit and vegetables.
Based on the estimate that UK supermarkets sold around £10.4 billion of fresh produce in 2017, researchers expect that funding the subsidy would cost the government £2.5 billion per year.
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“The food retail market is very competitive, so if there weren’t any fixed costs you would expect food to be sold close to marginal cost. And the fact that they are not affects diets,” said Professor Thijs Van Rens, leader of the Warwick Obesity Network.
“A higher price of any product means that people buy less of it. The question is, by how much? We find that if the market were working correctly, consumers would buy 15% more fruit and vegetables than they currently do, which would constitute a huge gain for public health.”
Van Rens added: “Obesity is a massive public health problem and we’re not going to solve it with tweaks.
“We need to bring out the big guns: subsidies and taxes. Anything less than that is just giving friendly advice and will not get us where we need to be.”