Indonesia, Malaysia Denounce France’s ‘Nutella Tax’

France’s decision to quadruple the levy for palm oil from 100 euros ($127) to 400 euros ($510) a tonne has been met with widespread criticism from local food producers and the world’s two largest exporters of the commodity, Indonesia and Malaysia, reported the New York Times on Wednesday, both of whom urged the French government to conduct a rigorous scientific study over palm oil’s health impact before imposing the new tax.

France’s decision to quadruple the levy for palm oil from 100 euros ($127) to 400 euros ($510) a tonne has been met with widespread criticism from local food producers and the world’s two largest exporters of the commodity, Indonesia and Malaysia, reported the New York Times on Wednesday, both of whom urged the French government to conduct a rigorous scientific study over palm oil’s health impact before imposing the new tax.

“[The tax amendment] is based on inaccurate claims that palm oil is bad for health and nutrition, and that Malaysia does not respect the environment,” claimed Malaysia’s Palm Oil Council, as cited by AFP on Monday.

The Palm Oil Council noted that the majority of French people consumed saturated fats through meat and cheese, while the French move would threaten the livelihood of over 240,000 small farmers.

[quote]“The action taken by French Senator [Yves] Daudigny… is irresponsible, badly-informed and ignores the primary source of saturated fats in the French diet,” the Palm Oil Council said.[/quote]

Yet Socialist deputy Daudigny has insisted that “palm oil is the most rich in saturated fats and its harmful effect on health has been established.” On Wednesday, the French Senate approved the tax amendment – dubbed the ‘Nutella Tax’ after the chocolate spread made out of 20 percent palm oil – by a vote of 212 to 133, with the National Assembly set to consider the amendment next.

“Let’s again do research into the health (impacts),” urged Sahat Sinaga, executive director at the Indonesian Vegetable Oil Association (GIMNI) to Reuters.

“From a technical and scientific point of view, this (the tax) is not correct,” Sinaga said, citing a past precedence when similar palm oil health warnings had gained heavy publicity in the United States decades ago, but was subsequently disproved by academic research.

The French food industry has also been in an uproar over the proposed amendment.

[quote]“Every nutritional and food expert concludes that palm oil is in fact free of dangerous trans fats, free of GMOs and contains valuable vitamins,” said Jean-Rene Buisson, head of France’s Ania food industry association. ” Palm oil as such is not bad for health…. Punitive acts such as raising a tax by 300pc to push industrials to use something else is absolutely scandalous.”[/quote]

The makers of Nutella, Italian firm Ferrero, also weighed in on the debate, claiming that “the [French] arguments are unfair and the repercussions would be catastrophic.”

Ferrero though insisted that even if the tax amendment went through, it would not alter its successful recipe, with more than 100 million jars of Nutella sold in France alone in 2008.

The Telegraph estimates that the tax amendment may bring in an additional 40 million euros for France’s state revenues. But even French health minister Marisol Tourraine has expressed her doubts over the amendment, urging “for a discussion on public health, and the risk for obesity in particular,” instead.

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[quote]”It is normal to deal with the health impact of palm oil but I’m not sure that we should engage the debate in the framework of a purely financial amendment,” Tourraine told Canal+ Television.[/quote]

Malaysia and Indonesia combined account for 85 percent of the world’s total production of palm oil. French people consume an average of 2 kg of palm oil a year and the country as a whole 126,000 tonnes.