France To Raise Taxes On Palm Oil Due to Health Concerns

By Tom
Updated on

France To Raise Taxes On Palm Oil Due to Health Concerns


On Monday, the Malaysian Palm Oil Council hit back at French claims that palm oil, a key ingredient in Nutella and widely used in margarine, biscuits, and crisps, was detrimental to the environment and fueling obesity. “Malaysia is deeply concerned with French Senator Yves Daudigny’s proposed 300% tax increase on palm oil … Palm oil is a healthy, natural and important product, which 240,000 small farmers in Malaysia are proud to produce.


Nutella’s main ingredients are sugar, milk powder, hazelnuts, cocoa, emulsifier, flavoring, and palm oil, which is also used widely in margarine, biscuits, and crisps.

France’s Socialist government plans to quadruple taxes on products containing palm oil, arguing that its production is harmful to the environment and its consumption is fueling obesity.

At present, palm oil is taxed at around €100 (£80) per metric ton in France, but the government is proposing to raise this to €400. Around 20% of Nutella is palm oil.

To take technical matters first:

Palm oil and palm kernel oil is a highly saturated fat that is semi-solid at room temperature, which is probably vital to its “spread-ability” on bread. Butter is also a highly saturated fat. Highly saturated fats turn rancid more slowly, but have been accused of being less healthy than the poly-unsaturated fats of fish oil. Turning rancid is the same thing that hardens traditional oil paint, which uses linseed oil to dry within a reasonable time: If you think watching paint dry is boring, then consider the problem using a highly saturated fat.

That is the chemistry of it – roughly.

On the market side there is in the October figures from a complete overhaul of the figures for both palm oil and – especially palm kernel oil (not entirely the same thing) – at the moment going 25 years back.

1)      Palm oil price went up 5x from the 1989-1998 level, according to the latest version of the truth, as opposed to the former claim of a tripling.

2)      Palm kernel oil is even stranger as of September 2012 price quoting had stopped somewhere around summer 2002. Now all of a sudden prices are available, with prices at the level where they lost contact with base in 2002.

What is going on? I have not the foggiest notion! But that we are talking concern for juvenile health and obesity seems like a proxy argument. Kids running about and playing sports can eat prodigious amounts of fat – though some might draw the line at axle grease – as they burn off a lot of calories. Few problems develop, as long as they get the other stuff too. It is us old sour-pusses that might have a problem with love handles or worse.

There is an old April 11th 2011 report in Berlingske:

The CEO of Ferrero Rocher died in Africa from a heart attack while riding a bike on vacation.

Any connection? I don’t know, but the timing is weird and the pathetic nature of the sad demise.

Letting the CEO rest in peace, we might be excused for thinking there is more to the story than is conveniently meeting the eye – as it has NOTHING to do with parental care. You just don’t revise trading figures 25 years back if there is no good reason.


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