Fererro: Sustainable palm oil, it takes two to tango
BRUSSELS: Ferrero, the Italian company that manufacturers Nutella, believes that achieving 100 per cent sustainable palm oil in Europe is not far-fetched provided industry players are ready to pay a premium for the edible oil.
Director, Nutella & Snack Presidency Olivier Charrier said the company made a decision way back in 2005 to tackle the issue of sustainability and became an active member of the Roundtable on Sustainable Palm Oil (RSPO).
Ferrero decided to directly obtain RSPO certified segregated palm oil, which keeps sustainable palm oil physically separated from nonsustainable palm oil and source it from certified sustainable plantations to the production line.
“We also wanted a commitment from smallholders, (from whom RSPO was sourced), including (an assurance that they are) not using paraquat,” he told Malaysia journalists after a talk on the food sector and sustainable palm oil policies at the European Palm Oil Conference on Thursday.
“So, the issue here is not in finding the right palm oil, because there is lot of palm oil in the market. The issue is whether the industry is ready to pay the right premium for the (RSPO) palm oil,” he asked.
Hence, for best practices in sustainable palm oil and low contaminants in palm oil, Ferrero pays a premium of 130 euros per tonne, which sums up to an additional 25 million euros annually.
However, the impact of the price on the final product to the consumers is almost irrelevant, said Charrier.
He said the company sourced 180,000 tonnes of palm oil or 0.3 per cent of the total global production annually. Out of which, 90 per cent came from Malaysia and the rest from other producing countries.
“So, if all edible palm oil used in EU has the same premium as Ferrero, the extra cost would be 500 million euros per annum – that would go to the upstream of Malaysia and Indonesia.
“Assuming this extra cost is fully passed to EU consumers, that would mean one euro per capita per year,” he explained.
Hence, he pointed out that what was at stake is to make sure the industry was “ready to pay the right premium to get access to the best possible oil and that farmers across the supply chain get rewarded for the efforts.”