Malaysia's official Palm Oil Council has denounced as "irresponsible" and "badly informed" a French move to slap a 300pc tax rise on palm oil, a key ingredient in Nutella.
"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.
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 for a tax increase by Senator Yves Daudigny.
The social commission of France's upper house adopted a proposal last Wednesday for a tax of €300 per tonne of palm, coconut and palm kernel oil used in human food on top of existing taxes of around €100. It would also apply to imported food products.
Given the presence of palm oil in the chocolate and nut spread, the proposed levy has been dubbed the "Nutella tax".
"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. Malaysia is one of the world's top two palm oil exporters and alongside Indonesia, accounts for 85pc of global production.
The council argued that most saturated fats consumed in France came from animal sources - from meat, milk, cheese and butter - and not from palm oil.
Last week, French food makers denounced the proposed tax, saying if palm oil was damaging to health, it should be banned, not taxed.
The use of palm oil has been met with an increasing public outcry in France and other parts of the world due to links to deforestation and ill health with several key French retailers promising to ban or cut the vegetable oil, or switch to sustainable sources.
But food manufacturers strongly disagree. "Palm oil as such is not bad for health," Jean-Rene Buisson, head of France's Ania food industry association said. "Punitive acts such as raising a tax by 300pc to push industrials to use something else is absolutely scandalous," he said.
The proposed tax still needs to be approved by the Senate before being sent to the lower house for approval.
But given French health minister Marisol Tourraine's lukewarm reaction to the proposal, it is unlikely to pass, at least without some amendment.
"It is normal to deal with the health impact of palm oil but I'm not sure that we should engage the debate in the framework of a purely financial amendment," Ms Tourraine told Canal+ television.
"I wish to take the time for a discussion on public health, the risk for obesity in particular," she said.
The left-wing Senator behind the proposal said he was motivated by concerns the high level of saturated fat in palm oil could increase risks of obesity and cause heart disease.
"This tax would be a price signal, not to consumers but to food makers so that they replace these oils by new recipes, more respectful of human health," the amendment says.
But Mr Buisson said palm oil, which is solid at ambient temperatures, was irreplaceable in products such as Nutella or some cookies.
Last week, the makers of Nutella said they would not change the recipe even if France, its biggest market, endorses proposals to quadruple the tax on palm oil. Frederic Thil, French director for Ferrero, the Italian company that makes the spread, told Le Parisien: "The arguments are unfair and the repercussions would be catastrophic."
He said Ferrero would do all it could to limit the hit from any tax rise for consumers.
Nutella's website says that it supports responsible palm oil use, only using palm oil which is extracted from controlled plantations in Malaysia.
French people consume an average of 2 kg of palm oil a year and the country as a whole 126,000 tonnes. If adopted the tax would add €40m to France's state health insurance pot.