A proposed tax increase on palm oil in food in France, dubbed the "Nutella tax", should not go ahead because health fears associated with the edible oil do not stand up to scrutiny, an industry group in top producer Indonesia said on Tuesday. The tax would rise to 400 euros ($510) a tonne from 100 euros if the proposal floated by a Senate committee this month secures majority backing in the Senate and in the lower house of France's parliament, the National Assembly.
The makers of Nutella said on Saturday they would not change the lucrative recipe even if France, its biggest market, endorsed the proposal The use of palm oil has been met with increased public opposition in France and other Western nations due to deforestation and to allegations it can cause health problems.
"It is wrong," Sahat Sinaga, executive director at the Indonesian Vegetable Oil Association (GIMNI) told Reuters. "It is not a new issue. I don't think they will pass this law." Similar palm oil health warnings gained heavy publicity in the United States decades ago and had subsequently been disproved by academic research, he said. "Let's again do research into the health (impacts)," said Sinaga, a former employee of Unilever. "From a technical and scientific point of view, this is not correct."
The main ingredients of Nutella food spread are sugar, palm oil, milk powder, hazelnuts, cocoa, emulsifier and flavouring. According to Nutella's website, more than 100 million jars were sold in France in 2008. Sinaga's comments echoed those on Monday by Malaysian Palm Oil Council chief Yusof Basiron, who said the French tax proposal threatened the livelihoods of more than 240,000 small farmers. In a statement, Basiron urged the French government to reject the proposal, which he said could significantly undermine the competitiveness of France's food industry.
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