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The Nutella Tax: patronising, protectionist and promoting poverty

Brian Sturgess - September 2013

Speed Read
  • Last year France came close to adopting a 300% rise in the tax on the import of palm oil, justified on health and environmental grounds.
  • The ‘fat’ tax was justified on health and environmental grounds, although there is no evidence that fat taxes are effective.
  • The proposal is being followed by copy-cat measures in Belgium and Switzerland despite the fact that Denmark withdrew a ‘fat’ tax after it failed to achieve its objectives.
  • Since it would discriminate against palm oil producers in Malaysia, Indonesia and West Africa in favour of European vegetable oil producers, the proposal is protectionist.

In late 2012 France came close to adopting a punitive tax on the import of palm oil with a proposal to raise the existing levy from €100 per tonne to €400, a rise of 300%. The proposal sponsored by Socialist Senator Yves Daudigny was justified on the dual grounds of improve French health and to fight deforestation in the tropics. Despite the rejection of the proposed tax whose main purpose is not to raise money, but to change behaviour, it is expected that its Socialist proponents in the Senate will reintroduce a similar measure this year. 

The proposed joint ‘health tax’ and ‘environment tax’ aroused much controversy stirred up by its ill-informed and politically motivated sponsors and supporters. Unfortunately, there is little economic evidence supporting the efficacy of ‘health taxes’ unless they are raised to pu...

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