FEMM

The Cost of Being a Woman: Latest research has shown that in addition to the tax on menstrual products, goods targeting female customers are approximately 5% more expensive compared to products advertised to men. Taking into account the already existing economic differences between men and women, what stance should the EU take on product pricing…

Committee on Women’s Rights and Gender Equality

By Leah Stella (NL)

Introduction 

Paying up to four-figure numbers more annually for the exact same products just because of one’s biological sex or gender affiliation is unfortunately still a prevalent phenomenon in most modern societies. Based on calculations, the pink tax can cause an annual difference of up to 1,200 euros more spent on products because they are advertised and marketed for women. Menstrual products have been used for centuries, and they are considered necessities in nearly every woman’s daily life. So why are these necessities the subject of higher prices sometimes? The additional hidden costs tied to products advertised for women can cause the lack of availability of basic necessities, in this case menstrual products, to people in need. In addition, women earn less on average, which then contributes to a higher relative costliness of the same products. 

Surprisingly, menstrual products are not the only goods that cost more, as prices of daily-use products, such as deodorants, shampoos, clothing, and razors, are also higher, compared to those advertised to men. Women often have to pay up to one-third more than men do for daily-use products, and with low-income communities, the struggle to purchase these items is present on a global scale. The challenge that this issue presents is mainly the confrontation with the retailers and manufacturers to reduce their prices, striving to let the companies base their prices on costs and quality instead of gender. The takeaway note of the topic is that every European citizen should have fair access to products required for hygienic reasons and other necessities. 

Glossary

  • The Pink Tax is the term for the economic gap between products advertised for male and female customers. There are no rules regarding  the pink tax, as it is not a tax that the government has universal direct access to, but an additional higher price on products for women. The term tax refers to the amount of money added to a product, and it is not a governmental tax. 
  • The Tampon Tax refers to the sales tax rate  that  governments impose on retail purchases of menstrual products. It has proven to contribute to period poverty and is a burden to menstruating citizens globally, without an exception for EU citizens, as seen in Figure 1. 
  • The gender pay gap refers to the present earnings difference between men and women. In the EU, on average, men are thought to make 12.7% more than women per hour, illustrated in Figure 2.
  • Menstrual products are products that are used for hygienic purposes during the menstruating part of the menstrual cycle. Menstrual products are not limited to just pads and tampons, but also include menstrual cups, absorbent underwear, and menstrual discs. Most menstrual products fall under the same category when it comes to value-added taxation.
  • Free market is a socioeconomic model that combines social policies and sufficient regulation with a free-market capitalist economic system to create a welfare state 1and fair competition in the market. This means that the government cannot interfere in the market to a large extent. Companies, retailers, and manufacturers can all base their prices on the free market price. 
Figure 1: The Tampon Tax comparison in European states in 2020.
Figure 2: The gender pay gap in Europe.

Relevant Stakeholders

Menstruating European citizens are directly on the receiving end of this issue. Having to pay extra for identical products and with the added tampon tax on products that are needed during menstrual cycles can cause these products to become unaffordable when especially needed. They have to pay a higher price for a given good, due to manufacturing being concentrated on women’s products, which may put these citizens under financial stress or prevent them from having access to bare necessities. By reducing the price of products by removing the pink tax and making menstrual products like tampons cheaper by lowering or removing the tampon tax, these products should become more accessible, even for women in poverty. 

Citizens are purchasing products from retailers and manufacturers who do not have significantly relevant limits or regulations when it comes to the pink tax. The question of whether it is acceptable to charge more for a product they wish to sell to the customer simply because it is pink or targeted towards women is raised. They can not change the taxes which apply to their product pricing implemented by the government, but they can change the retail price. Furthermore, Member States’ national governments decide about the VATs on menstrual products, which is why disparities between Member States regarding the tampon tax are so apparent, as the EU only has limited competences over taxation policies in Member States. Nonetheless, some Member States do actively work towards achieving

an end to the practice of pink tax and gender-based pricing discrimination more than others. 

Non-governmental organisations (NGOs) like WIDE 2and Akcja Menstruacja3 are also taking the first steps as stakeholders to advocate the necessary changes and alter the status quo.

Key Conflicts

The goal of manufacturers and retailers is, naturally, to maximize their profit margins 4on the goods they sell. In an attempt to maximize profits, salespeople may employ a variety of techniques to encourage customers to pay as much as possible. European consumers who purchase products advertised to women, will have to pay more for this product, because the companies are implementing a money-focused strategy. This will eventually result in the product becoming inaccessible to women of lower socio-economic backgrounds, highlighting economic gaps in society even more. Apart from sanitary benefits, menstrual products are also crucial for maintaining reproductive health, meaning their inaccessibility poses a great risk to menstruating people’s health. Purchasing these products becomes more difficult when the price is too high. With two financial burdens, the gender-related socioeconomic gap widens. 

There are justifications for these costs, which include the pink tax and the tampon tax. The States’ governments have the authority to increase or decrease the taxation of menstrual products, thereby influencing their availability. For example, Members of the Slovenian Parliament rejected such a proposal for an additional VAT reduction on hygienic products because it turned out that such reductions in VAT are not as successful in lowering the final prices for consumers. The tax reduction is rarely not replaced by a higher pre-tax price5 set by suppliers of these products. This phenomenon was observed in Slovenia in 2021 when the VAT rate for sanitary products was reduced from 22% to 9.5%. The tax reduction was nearly instantly replaced by a raise in the pre-tax price. The same sentiment for opting out of tampon tax reduction is shared in other Member States.There are scattered gaps in taxes on menstrual products between EU Member States. The tax is being settled after much debate, but this has an impact on product accessibility: the higher the tax, the higher the price of the products. Different countries may have different perspectives about how best to impose taxes on goods (such as food, clothing, medicine, and menstrual supplies). Figure 3 illustrates how some nations tax something as optional and worthy of discouragement as cigarettes similarly to menstrual products, with a significant difference between countries like Ireland and Hungary. 

Figure 3: Value-added tax on sanitary towels and tampons compared to jewellery, cigarettes, beer and wine in different Member States in 2018.

Because of the free market manufacturers and retailers are free to set the prices of their products. This justifies the addition of the pink tax. A dispute between businesses striving to maximise profits from sales by raising prices and women who are paying more for the same products than men is still very much a relevant and ongoing issue. Companies do not want to lower their price, and women do not want to pay more for these products. 

Measures in Place

Since the problem is primarily between the seller and the customer, the citizens have taken several actions, like boycotting for example, where women refused to buy the products with the pink tax added. The numbers are encouraging companies to refrain from adding these additional costs to the products, and are supporting everyone worldwide in speaking out about the pink tax. Similarly, as women become more aware of the differences in quality and cost, they can gradually distance themselves from these products. To avoid paying higher prices, women consider buying razors marketed towards

men. When there are no longer any interests or profits, the pink tax, in theory, would gradually disappear from the market prices. 

The pink tax is slowly being left behind, and the tampon tax is slowly meeting its end in Europe too. Ireland is the first and only Member State that already removed the additional tax on menstrual products. Beginning on the 1st of January 2020, sanitary item taxes in Germany were reduced from 19% (the basic rate) to 7% (the reduced rate). This is a step toward a non-discriminatory tax system for women in the rest of Europe. France, Spain, Portugal, and the Netherlands have either recently lowered their taxes or intend to do so. However, a unified tampon-tax-free EU is far from being achieved.

 In some Member States, steps to decrease or abolish these taxes are slowly being taken. Menstrual products are normally taxed at the same rate as items such as decorative items, electronics, cosmetics, and toys. In most Member States, this is because the products are taxed as luxury products. 

NGOs like WIDE and Akcja Menstruacja are taking the first steps to change this issue. Akcja is one of the many NGOs that are starting to give out free menstrual products. Inspiring NGOs in Scotland also work towards getting rid of period poverty by spreading their efforts one city at a time. A rising number of institutions now feel obligated to provide their students, employees or colleagues with sanitary products. In France, for example, it is now required to give out free menstrual products to their students.

Key Questions 

  • How can the EU help NGOs provide information about similar products that cost more for women than for men, and this way spread awareness about the pink tax?
  • How can consumers and retailers be encouraged to purchase and sell goods respectively based on quality rather than gender?
  • How can the EU influence its Member States with what the benefits of tax-free menstrual products are?
  • Given that single-use menstrual products such as pads and tampons have a very high plastic content, what balance should the EU and its Member States try to find between making menstrual products accessible, while making unsustainable practices unappealing to the customers?
  1. A welfare state refers to a state dedicated to ensuring the fundamental economic well-being of its citizens by safeguarding them against market-related risks linked to old age, unemployment, accidents, and sickness. ↩︎
  2.  WIDE is a European NGO spreading awareness about how to help to give women a platform to donate, write and share their experiences. ↩︎
  3. Akcja Menstruacja is a polish NGO who, to this day, provides free and accessible menstrual products to students at Polish schools and universities. Similar NGOs exist in other Member States.
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  4.  A profit margin is a measurement of a business’s earnings (or profits) in relation to its revenue in accounting and finance. ↩︎
  5. Pre-tax price is the price a product had before any additional sales taxes. These sale taxes are added by the retailer and/or selling companies.
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