November 8, 2012 / 5:56 PM / 5 years ago

French food makers decry palm oil tax proposal

* French Senator proposes to quadruple palm oil tax

* Food makers say proposal scandalous

* Health minister dubious on need for tax

By Sybille de La Hamaide

PARIS, Nov 8 (Reuters) - French food makers on Thursday denounced a proposed fourfold tax increase on palm oil in food, saying that if it was damaging to health it should be banned, not taxed.

The social commission of France’s upper house adopted a proposal on Wednesday for a tax of 300 euros per tonne of palm, coconut and palm kernel oil used in human food on top of existing taxes of around 100 euros. It would also apply to imported food products.

The use of palm oil has been met with an increasing public outcry in France and other parts of the world due to links to deforestation and ill health with several key French retailers promising to ban or cut the vegetable oil, or switch to sustainable sources.

But food manufacturers strongly disagree.

“Palm oil as such is not bad for health,” Jean-Rene Buisson, head of France’s Ania food industry association said.

“Punitive acts such as raising a tax by 300 percent to push industrials to use something else is absolutely scandalous,” he said.

The proposed tax, dubbed “Nutella tax” in France because the chocolate and nut spread contains a significant amount of palm oil, still needs to be approved by the Senate before being sent to the lower house for approval.

But given French Health Minister Marisol Tourraine’s lukewarm reaction to the proposal, it is unlikely to pass, at least without some amendment.

“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.

“I wish to take the time for a discussion on public health, the risk for obesity in particular,” she said.

The left-wing Senator behind the proposal said he was motivated by concerns the high level of saturated fat in palm oil could increase risks of obesity and cause heart disease.

“This tax would be a price signal, not to consumers but to food makers so that they replace these oils by new recipes, more respectful of human health,” the amendment says.

But Buisson said palm oil, which is solid at ambient temperatures, was irreplaceable in products such as Nutella or some cookies.

French people consume an average of 2 kg of palm oil a year and the country as a whole 126,000 tonnes. If adopted the tax would add 40 million euros to France’s state health insurance pot.

France adopted a 160 percent rise on beer taxes in October and last year introduced a levy on drinks containing added sugar or artificial sweeteners to help combat obesity.

The proposed additional palm oil tax of 300 euros currently accounts for a rise of 45 percent on European palm oil prices, quoted at $845 or 663 euros in Rotterdam. ($1 = 0.7840 euros) (Additional reporting by Yann Le Guernigou; Editing by Jon Hemming)

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