When governments finally agreed to scrap value-added tax on sanitary products, campaigners celebrated a major victory. The argument seemed obvious. If you remove a 5% tax from essential items like pads and tampons, consumers will pay 5% less at the till.
It didn't work out that way.
In reality, cutting sales tax on period products did remarkably little to lower retail prices. Retailers and manufacturers quietly absorbed much of the tax relief into their profit margins, leaving consumers with virtually the same prices as before. What was billed as a landmark policy to tackle period poverty turned out to be a lesson in basic retail economics.
The Math Behind the Broken Promise
Tax cuts sound great in parliamentary speeches. They rarely work smoothly on supermarket shelves.
When the UK abolished the 5% VAT rate on sanitary products in January 2021, supporters expected immediate relief. If a pack of tampons cost £2.00, it should have dropped to around £1.90. But pricing in consumer packaged goods doesn't follow a simple linear formula.
Supermarkets set prices using strategic price points. Items are priced at £1.99, £2.50, or £3.00 to fit psychological pricing brackets. When a 5% tax drops off, a £2.50 box of pads theoretically becomes £2.38. Most retailers don't like odd numbers like £2.38. They either round the price back up to £2.49 or allow wholesale inflation to swallow the difference within a few months.
Independent economic evaluations of tax removals on period products in several countries, including the UK and parts of the United States, showed a familiar pattern. A small fraction of the tax savings made it to the checkout counter in the first few weeks. Within six months to a year, general inflation and supply chain adjustments completely erased those savings.
Why Retailers Profit While Shoppers Pay
Retailers didn't necessarily hatch a villainous plot to steal tax relief from women. The mechanics of retail competition simply allowed them to keep the margin.
When demand for a product is inelastic, meaning people need to buy it regardless of small price changes, sellers have zero economic incentive to pass tax cuts down to buyers. Menstrual products are the textbook definition of inelastic demand. You cannot skip buying them or wait for a holiday sale when you need them today.
Here is what happens when a tax is removed on an inelastic good:
- The government gives up tax revenue.
- The retailer sees a higher profit margin per unit sold.
- The consumer keeps buying at the standard market rate.
- Inflation in raw materials like cotton and pulp absorbs whatever margin remained.
Instead of lowering costs for low-income buyers, the tax cut effectively transferred public tax dollars directly into corporate profit margins.
Tax Relief Never Addressed Period Poverty
Equating tax removal with solving period poverty was always a flawed premise.
Period poverty is driven by systemic income inequality, housing instability, and inadequate social safety nets. A 5% discount on a £3 pack of pads saves a buyer 15 pence. For someone struggling to choose between buying food or personal hygiene items, 15 pence per month makes no meaningful difference.
The obsession with tax policy distracted politicians from structural solutions that actually work.
Look at Scotland. In 2020, Scotland took a completely different approach by passing the Period Products Act. Instead of tweaking tax rates and hoping corporate retailers would pass along pennies in savings, the Scottish government made period products free for anyone who needs them. Local authorities, schools, universities, and public venues are legally required to provide free items in public toilets.
That is a direct solution. Scrapping a 5% tax is a cosmetic tweak disguised as social progress.
What Real Policy Change Should Look Like
If politicians want to help people manage essential health costs, tax policy is the wrong tool. Here are the practical measures that make a real difference:
Mandatory free access in public spaces. Schools, colleges, hospitals, and community centers should provide free, accessible menstrual hygiene products just like they provide toilet paper and soap.
Direct support through social benefits. Expanding targeted financial assistance or providing vouchers for essential personal care goods helps low-income households far more than broad tax breaks that benefit high earners equally.
Price monitoring and antitrust scrutiny. When governments eliminate taxes on essential goods, regulatory bodies should monitor retail pricing to ensure corporations don't immediately absorb the tax cut into profit margins.
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Practical Steps to Reduce Personal Costs Right Now
While policy debates drag on in parliament, managing personal hygiene budgets requires immediate practical steps:
- Check local community centers and libraries. Many local councils and charities now distribute free emergency supplies without requiring proof of income.
- Explore reusable options. Reusable period underwear, silicone cups, and washable pads require an upfront investment, but they eliminate recurring monthly purchases entirely over several years.
- Look into store brand alternatives. Name-brand manufacturers spend millions on marketing and pass those costs to buyers. Unbranded supermarket alternatives often meet the exact same safety and absorbency standards for a fraction of the cost.
Tax cuts make for good headlines, but they rarely fix structural cost problems. True accessibility requires direct provision and policy that targets the root causes of financial hardship.
