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The New Economy

Nutella tax: Is France taking austerity too far?

Nutella tax is aimed at reducing unhealthy ingredients in French food. But by taking on a French favorite, the Nutella tax is spurring a backlash.

By Staff writer / November 15, 2012

Nutella, produced from Italy, is sold in 200 countries, including this supermarket in Vitez, Bosnia and Herzegovina, pictured in March. In France, the world's largest consumer of the chocolate-hazelnut spread, a Nutella tax is spurring a backlash.

Dado Ruvic/Reuters/File

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Everyone understands France's fiscal austerity: Too much government spending and too little revenue has prompted French President Francois Hollande to cut spending and raise taxes on rich people, capital gains, and just about anything else he can find.

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But in approving the so-called "Nutella amendment" Wednesday, France's Senate is invoking a new kind of food austerity: trying to encourage healthier eating by taxing unhealthy ingredients.

That's a tricky political move anywhere. In food-crazy France, it's dangerous, especially when the target is Nutella, the creamy chocolate-hazelnut spread that the French just love.

French children slather it on bread with the same gusto that American kids make peanut butter sandwiches. Adults put it on crepes. Although it's an Italian product, 26 percent of the world's Nutella is consumed in France, more than any other country, according to the French newspaper Le Monde.

Actually, the Nutella tax is aimed at palm oil, not the spread directly. Since it will raise only about €40 million (about $51 million) in revenue, it's no big deal in the budget picture. Instead, it's meant to reduce French obesity.

Palm oil has been linked to cholesterol and health risks. Nutella, it turns out, is 17 percent palm oil and 55 percent sugar, hardly the healthiest of snacks. Gram for gram, it packs 76 percent more calories than a McDonald's cheeseburger, according to Le Monde.

By quadrupling the tax on palm oil, Socialist Sen. Yves Daudigny, who wrote the "Nutella amendment," hopes to force food companies to switch to healthier ingredients.

But a top official of Ferrero, which makes Nutella, told a French newspaper the company had no intention of changing ingredients. The Nutella tax would only raise prices a few pennies per jar, if at all.

The outlook for the Nutella tax is unclear. The French Senate still has to approve the entire package of tax increases. Senator Daudigny himself cosponsored a measure to reduce a proposed tax hike on beer. If the senate rejects the package, the Nutella tax could reappear in another form.

The worldwide visibility and popularity of the product is spurring a backlash.

The two largest exporters of palm oil, Indonesia and Malaysia, have already criticized the tax. On Twitter, Nutella fans are battling healthy-food advocates over the tax issue.

"Our country is becoming less and less attractive," tweeted one French Nutella lover after the Senate's 212-113 vote in favor of the tax.

"How dare the French tax nutella!" tweeted another fan. "That is a gift from heaven...."

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