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New Taxes Boost Cost of Nutella As French Take Measures to Avoid Getting Fat

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Nutella (Photo credit: Wikipedia)

When I was in the UK years ago, a friend offered me a slice of bread with a creamy brown spread on top.

"Try it," she said, "You'll like it."

Like it? I loved it. As in couldn't believe why it wasn't illegal loved it.

"Whmpgh isth ifh?" I asked, which translated without a mouth full of sticky spread the consistency of peanut butter is, "What is it?"

"Nutella," she said, simply.

"Is it chocolate?"

"Nope, Nutella."

In fact, Nutella, the treat loved all over the world - but especially in Europe - may taste like chocolate but it isn't. It's a spread made from hazelnuts.

During World War II, Mr. Pietro Ferrero, a pastry maker, used hazelnuts, which were easily available in the Piedmont region of Italy, to extend his chocolate supply since cocoa was being rationed. The product was a hit for Ferrero and his company began mass producing the spread. It eventually became a staple in European markets - often eaten on bread for breakfast - and was finally exported to part of the U.S. in 1983. Now, it's fairly easy to find here and is gaining popularity all over the U.S. since it has no artificial colors or preservatives and is peanut free (a big deal in schools these days). Also? Delicious.

But as Nutella gains popularity in the U.S., it is finding itself under fire in Europe. This week, the French Senate made global news when it proposed the "Nutella amendment" which imposes taxes on the spread. Despite the moniker, the tax isn't actually aimed at Nutella: it's targeting palm oil. Palm oil, which is traded mostly from Malaysia, is on tap to be taxed at nearly four times its current level. Palm oil is an essential ingredient of Nutella - which means, of course, that taxing palm oil may cause the cost of the beloved product to skyrocket.

The tax was put into place not so much as a revenue raiser but as a proper sin tax. It turns out that palm oil isn't exactly healthy, according to those who proposed the tax. It is high in saturated fat and it is, they fear, making the French fat (quelle horreur!).

The makers of Nutella respectfully disagree, noting that the product has less saturated fat than butter and is not produced in the same way as, say, trans fats, which have been banned in many parts of the world (like New York). And despite a tax hike, the company refuses to budge, claiming that it will not change its recipe. Nutella France's CEO, Frédéric Thil, had a better idea: rather than stop production, he suggested that, like other beloved products in France such as butter and cheese, folks would do well to simply: "Il ne faut pas en abuser." That means, roughly, "Don't overdo it."

How politically dangerous is this kind of proposal for French politicians? More than a quarter of the Nutella sold in the world is devoured by the French. Even with that kind of support for the spread, the measure was pushed through the Senate.

As for the Socialist Senator Yves Daudigny who proposed the tax? His name is also on a measure to tax beer. Is nothing sacred in France anymore?

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