Background information

Food prices in Denmark have increased significantly in recent years, putting pressure on household budgets and reducing purchasing power. In response, the newly appointed Danish government included a proposal in its government platform to halve VAT on food products and introduce zero VAT on fruit and vegetables. While the proposal is not directly linked to the disruption of energy markets following the closure of the Strait of Hormuz, it represents a broader policy response to rising food prices and cost-of-living pressures. The proposal has gained additional relevance in light of the recent energy price shock, which may further increase production, transport and food costs. At the time of reporting, the measure has not yet been adopted and therefore remains a policy proposal.

Content of measure

The measure proposes to reduce VAT on food products by 50% and abolish VAT on fruit and vegetables. It is intended to lower the prices of essential consumer goods and strengthen households’ purchasing power in response to rising food prices. The measure would apply nationwide and benefit consumers purchasing food products, while also affecting businesses involved in the production, distribution and sale of food. The proposal is not targeted at specific occupational groups or income categories but is intended to have a broad impact across the population. At the time of reporting, the measure has not yet been adopted. The measure is expected to provide temporary relief from inflationary pressures and support overall consumer spending.

Use of measure

As the measure has not yet been adopted or implemented, no information is available on actual uptake, realised beneficiaries or effectiveness. If adopted, the measure is expected to have a broad reach, as it would apply to consumers across Denmark through reduced VAT on food products and zero VAT on fruit and vegetables. The proposal is intended to lower food prices and improve purchasing power, particularly for households affected by rising living costs. However, the extent to which the VAT reduction will be passed on to consumers remains uncertain and has been the subject of public debate.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Applies to all citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: N/A

Involvement

At the time of reporting, no information was available regarding formal social partner involvement in the design of the measure. The proposal forms part of the newly adopted government platform and has not yet been translated into legislation. Consequently, it remains unclear whether employers’ organisations and trade unions will be formally consulted during the legislative process. No information was identified on social partner involvement in the implementation, monitoring or evaluation of the proposed measure. However, employers’ organisations have already participated in the public debate surrounding the proposal.

Views and reactions

Employers’ organisations have expressed critical views on the proposal. Danish Industry (DI) argued that introducing reduced VAT rates on food products and zero VAT on fruit and vegetables would increase administrative burdens and compliance costs for businesses by requiring companies to manage multiple VAT rates. DI also questioned whether the proposal would effectively benefit consumers and argued that a permanent reduction in electricity taxes would be a more effective way of supporting households and businesses. Similar concerns were raised by the Chair of the Danish Economic Council, who noted that VAT reductions are not always fully reflected in lower consumer prices and may instead be absorbed within supply chains, resulting in higher profits for producers and retailers rather than lower prices for consumers.

Sources

• 02 June 2026: DR.dk (www.dr.dk)