Even though the palm oil industry is worth $44 billion, it has been under pressure since authorities in Europe have listed palm oil as a risk for cancer. But the industry found an ally that's quite vocal about the issue: Ferrero, the producer of Nutella.
Ferrero is an Italian confectionery firm that has taken a defensive public stance to an ingredient that other food companies have already boycotted. The company has launched an ad campaign to assure everyone about Nutella's safety. Nutella, a favorite worldwide, is Ferrero’s flagship product and it makes up at least 1/5 of the company's sales.
The chocolate and hazelnut spread is a popular treat for children and it relies on the edible oil to give it a longer shelf life and a smoother texture. Other substitutes like sunflower oil are likely to change Nutella’s character, according to Ferrero.
"If we produce Nutella without using palm oil, the end product will most definitely be an inferior substitute to the real product, which is surely a step backward," explained the purchasing manager of Ferrero, Vincenzo Tapella, in an interview with Reuters.
A move away from the palm oil industry would also have an economic implication. Palm oil is the cheapest kind of vegetable oil as it only costs more or less $800 a tonne. As for sunflower oil, it comes at $845 a tonne and $900 or more for more costly substitutes like rapeseed oil.
Ferrero uses approximately 185,000 tonnes a year, which means replacing palm oil would cost the company an extra 8 to 22 million dollars a year. Ferrero did not give any comment regarding these calculations.
Europe's Food Safety Authority released a statement in May regarding the ability of palm oil to generate a carcinogenic contaminant compared to other vegetable oils if refined at 200 degrees Celsius. However, it did not recommend the consumers of palm oil to stop consuming it. Instead, it said that further study will be conducted to assess the risk.
In 2014, the European Commission issued a detailed research on the GE contaminant and has identified it to be potentially harmful during industrial refining.
The Food Safety Authority does not have power in making regulations. However, the issue is being reviewed by the European Commission members. Enrico Brivio, Health & Food Safety spokesman, said that guidance will surely be issued at the end of the year. He added that measures may include regulations that will limit GE level in food products. Brivio also said there won't be a ban on palm oil use.
UN Food & Agriculture Organization and World Health Organization flagged the risk of GE as well. Still, it did not say that consumers should stop using palm oil. As for the Food & Drug Administration of the US, it did not ban palm oil use in food production.
The issue became controversial when Coop, a large supermarket chain, boycotted palm oil. Barilla, the biggest baker in Italy, also eliminated its use of palm oil. Despite the controversy, Ferrero is still advertising the safety of its products and fighting back against the fears of cancer risk.