Malaysia Slams Proposed 300% French "Nutella" Palm Tax

Malaysia'a official Palm Oil Council on Monday slammed as "irresponsible" and "badly informed" a French senator's call to slap a 300-percent tax increase on palm oil, known in France as a "Nutella tax" after a popular brand of spread.

"The proposal is based on inaccurate claims that palm oil is bad for health and nutrition, and that Malaysia does not respect the environment," the council said in a statement received here.

It insisted that palm oil is "a healthy, natural and important product which 240,000 small farmers in Malaysia are proud to produce" and urged the French government to reject the call by Senator Yves Daudigny.

Daudigny asked for the tax hike on the grounds that production of palm oil harms the environment and its consumption fuels obesity.

The tax has been the dubbed the "Nutella tax" as palm oil is the main ingredient in the chocolate spread that is hugely popular in France.

"The action taken by French Senator Daudigny... is irresponsible, badly-informed and ignores the primary source of saturated fats in the French diet," said the Palm Oil Council statement.

It argued that most saturated fats consumed in France came from animal sources -- from meat, milk, cheese and butter -- and not from palm oil.

Environmentalists say palm oil, which is widely used as biofuel and in processed food and toiletries, is grown on vast plantations leading to deforestation which threatens rare species such as orangutans and rhinos.

Malaysia is one of the world's top two palm oil exporters and alongside Indonesia, accounts for 85 percent of global production.