Palm oil exporters may have to experience yet another hard time as another anti-palm oil move is heating up in France.
This comes in the form of a proposed protectionist and discriminatory tax currently lobbied by two French politicians, Senator Yves Daudigny and Senator Catherine Deroche, which is set to pose a major threat to Malaysia’s top commodity export in Europe, according to palm oil industry market observers.
Both Daudigny and Deroche had presented a report to the French Senate calling for an introduction of “behavioural” taxes on food and beverages deemed dangerous to the public health in France.
In this report, the senators include a recommendation for taxes on all vegetable oils to be “harmonised”, according to Daudigny. This would mean a tax rise for palm oil. He claims that palm oil is “under taxed” compared with some other oils, such as sunflower and rapeseed.
Within Europe, France already has a history of anti-palm oil campaigning.
Back in 2011, the same politician had attempted to lobby for an imposition of a 300% tax on palm oil, popularly dubbed as the “Nutella Tax”.
The tax was supposedly to encourage the French people to consume a more healthful diet, but some quarters believe that the real target is palm oil, a key ingredient in Nutella.
Nutella is a chocolate and hazelnut spread made by Italian company Ferrero that is extremely popular in France, which accounts for 26% (about 100 million jars) of the product’s world consumption.
However, thanks to the quick action and successful engagements by the Malaysian government and palm oil industry players, the Nutella tax proposal was gunned down in December 2012.
So this year, Daudigny is trying a new attempt to champion his cause by roping in Deroche to propose that all taxes of vegetable oils in France be “harmonised”.
For most palm oil supporters, this is a purely a protectionist argument as sunflower oil receives massive subsidies in France, thus it is totally an unfair comparison with palm oil, say local industry players.
The agenda is clear as Daudigny represents an area in France that is well known to be a producer of rapeseed. His tactic here is to continue attacking palm oil, and to try to reduce Malaysian palm oil exports to France.
He also tries to disguise the proposal by using misleading words like “harmonisation” of taxes for all vegetable oils into France, when for a fact he is asking for a major tax hike on palm oil as claimed by many palm oil producers including from Malaysia.
This tax rise could also increase the CPO prices for French consumers and could also strongly harm the palm oil market there.
Should the proposed tax be approved, many fear that it will have far reaching consequences not only in France, but also in neighbouring countries such as Belgium.
Daudigny’s latest proposal is linked to a report on “Proposals for a new impetus to French Nutrition Policy” by a French professor, Serge Hercberg.
Hercberg, who has been an advisor to many French government health bodies and currently the French Institute of Health & Medical Research director of epidemiological research has invited the French government to adopt new rules on food labelling and taxes.
He cited saturated fats as a reason, but palm oil actually contains only a small percentage of saturated fats in France unlike the other saturated fats mostly derived from the consumption of meat, butter and cheese, the staples in many European countries.
So why is this latest anti-palm oil campaign in France a concern for Malaysia? The answer is in the timing of the new campaign, which coincides with 2014 being the year of public health in France.
In January, French minister Marisole Touraine had announced the adoption of a new health law, which in turn will regulate food and Touraine is slated to reveal the main directions of the future health law this month.
The draft law will start to be debated in the French Parliament at end-2014.
Hence, given the limited timeline, it is therefore urgent for both the Malaysian Government and palm oil exporters to quickly act on the issue.
Daudigny and Hercberg are clearly trying to influence the debate on nutrition in France and push their proposals within the coming health law.
Currently, the debate on nutrition is circulating in the French media. Several newspapers, including France’ most famous newspaper Le Monde, have recently reported the new “Nutella Tax” push.
Other French news publications, including Que Choisir and Journal de Dimanche have also reported on the new developments.