What’s making your plant-based shopping more expensive? Hint: it’s not the food

No doubt you’ve noticed how a carton of oat milk, a vegan pizza, or a pack of plant-based burgers can often cost more than their animal-based counterparts? In fact according to a 2022 study by GFI, plant-based meat is on average 67% more expensive than an animal-based counterpart, while plant-based milk was reported as 87% more expensive than dairy milk.¹

It’s not always the case, and there have been some positive developments, for example in Germany,² but it remains a frustrating reality for many people shopping plant-based. You can see the difference on the price sticker, but what is less obvious is that the reasons behind the price gap have less to do with the cost of ingredients or how the products are made, and more with the way taxes and subsidies are structured. Let’s break it down.

1. VAT: how it makes your plant-based shop cost more

Think about your last supermarket shop: did the price of oat milk make you hesitate while regular milk seemed like a bargain by comparison? That’s VAT at work.

In the UK, VAT (Value Added Tax) applies to most goods and services. While many staple animal-based foods like meat, fish, and dairy are zero-rated – meaning no VAT is added – plant-based alternatives often carry a 20% VAT charge.³ Similar taxes exist across the EU and in other countries, although the rates and rules vary.

This tax discrepancy often makes plant-based options more expensive at the checkout than animal-based equivalents – it’s not because retailers are charging a premium for your preference. For example, while cow’s milk is zero-rated, plant-based milks like almond or oat milk are taxed at the standard rate.⁴

2. Subsidies: supporting the status quo

There’s another reason why meat and dairy often seem like “budget-friendly” choices compared to plant-based: agricultural subsidies. These are government payments to farmers, designed to support food production. Historically, most of these funds have gone to animal agriculture—meat and dairy—making those products cheaper to produce and, therefore, cheaper to buy.

According to a recent analysis, over 80% of the European Union’s agricultural subsidies support animal-based foods.⁵ The situation in the UK is similar. This imbalance in funding makes it harder for plant-based products to compete on price, leaving us consumers paying more for sustainable choices.

3. True costs are hidden

There’s more to the ‘cost’ of a product than the price on the sticker. Supermarket prices often fail to reflect the hidden environmental and social costs of food production. Producing meat and dairy contributes significantly to greenhouse gas emissions, deforestation, and water usage – yet these costs are not accounted for in their price tags.

By contrast, plant-based foods – despite generally having a much lower environmental footprint – often end up costing more at the checkout because they lack the same subsidies and tax breaks as animal-based products.⁶

4. Change is happening globally

There are some signs of change to the price inequality: certain countries are already taking action to fix the imbalances:

Germany: The Green Party has proposed raising VAT on meat from 7% to 19%, and using the funds to support environmentally friendly farming practices.
Denmark: Policymakers are considering a tax on red meat to account for its environmental impact.
Sweden: Lower VAT rates on plant-based foods have encouraged more people to choose these options, with positive impacts on health and the environment.

These steps give a taste of how smarter food policies can benefit both people and the planet.

5. What can we do?

While systemic changes are needed to make plant-based options more affordable, there are still ways you can help drive change—and save money—through your choices.

Shop Smart: Look out for discounts on plant-based products, and consider budget-friendly staples like lentils, beans, and tofu. Buying in bulk or opting for store-brand plant-based items can also help stretch your grocery budget.
Support Advocacy Campaigns: Get involved with groups working to level the playing field for plant-based foods. Many organizations provide petitions or resources to help you raise your voice for fairer food policies.
Support Retailers Making a Difference: Some retailers are working to close the price gap between plant-based and animal-based foods. For example, Lidl has committed to pricing its own-label vegan range at parity with animal-based equivalents in Germany,⁷ and similar efforts are underway in the UK and other countries.⁸
Make It Yourself: If prices at the store are daunting, try preparing plant-based meals from scratch. Simple, homemade recipes for plant-based burgers, oat milk, or lentil dishes can cut costs and add a personal touch to your meals.

The Plant Milk Report: moving towards a healthy and sustainable diet

ProVeg’s first report on plant milk shines a light on the top-selling product in the entire plant-based alternatives market.

Every step you take adds momentum to the movement for a fairer, more sustainable food system.

The next time you’re at the supermarket, remember: every plant-based choice you make supports a growing movement for fairer prices and a more sustainable food system. Change may take time, but together, we’re paving the way – one meal at a time.