Nutella has hit back at a major food safety report that said an ingredient in the popular spread could cause cancer. Italian confectionery firm Ferrero has taken a public stand in defence of palm oil after a dip in sales and other food companies in the country boycotting the ingredient. The move comes after the European Food Safety Authority said in May that palm oil generated more of a potentially carcinogenic contaminant than other vegetable oils when refined at temperatures above 200 degrees Celsius. It did not recommend consumers stop eating it and said further study was needed to assess the level of risk. But the $44 billion palm oil industry has been in a flap since – with boycotts from companies including the major supermarket chain Co-op. Retail sales of Nutella in Italy fell by about 3 percent in the 12 months to the end of August, which Ferrero partly blamed on rivals promoting products as palm oil-free. To address consumer concern, the company launched its advertising campaign in September and says it is now showing results. Nutella sales in Italy rose 4 percent in the last four months of 2016, said Alessandro D’Este, the head of Ferrero’s Italy business. Global Nutella sales have been unaffected by the EFSA opinion and are growing at 5-6 percent annually, the company said. Nutella is its flagship product which makes up about a fifth of its sales. The hazelnut and chocolate spread, one of Italy’s best-known food brands and a popular breakfast treat for children, relies on palm oil for its smooth texture and shelf life. Other substitutes, such as sunflower oil, would change its character, according to Ferrero. “Making Nutella without palm oil would produce an inferior substitute for the real product, it would be a step backward,” Ferrero Purchasing Manager Vincenzo Tapella told reporters. He features in a TV commercial aired in Italy over the past three months that has drawn criticism from some politicians. Any move away from palm oil would also have economic implications as it is the cheapest vegetable oil, costing around $800 a tonne, compared with $845 for sunflower oil and $920 for rapeseed oil, another possible substitute. Ferrero uses about 185,000 tonnes of palm oil a year, so replacing it with those substitutes could cost the firm an extra $8-22 million annually, at those prices. The company declined to comment on these calculations. The detailed research into the contaminant – known as GE – was commissioned by the European Commission in 2014 after an EFSA study the year before, into substances generated during industrial refining, identified it as being potentially harmful. EFSA does not have the power to make regulations, though the issue is under review by the European Commission. The spokesman for Health and Food Safety, Enrico Brivio, said guidance would be issued by the end of this year. Measures could include regulations to limit the level of GE in food products, but there will not be a ban on the use of palm oil, he added. The World Health Organisation and the UN Food & Agriculture Organisation flagged the same potential risk that EFSA had warned of regarding GE, but did not recommend consumers stop eating palm oil. The US Food & Drug Administration also has not banned the use of palm oil in food. The issue became a hot consumer topic in Italy after the largest supermarket chain, Coop, boycotted palm oil in all its own-brand products following the EFSA study, describing the move as a “precaution”. Italy’s biggest baker, Barilla, also eliminated it and put “palm oil-free” labels on its wares. The retailers’ decisions followed pressure from activists, including Italy’s main farming association Coldiretti and online food magazine Il Fatto Alimentare, which called on all food firms to stop using palm oil. High temperatures are used to remove palm oil’s natural red colour and neutralise its smell, but Ferrero says it uses an industrial process that combines a temperature of just below 200C and extremely low pressure to minimise contaminants. The process takes longer and costs 20 percent more than high-temperature refining, Ferrero told reporters. But it said this had allowed it to bring GE levels so low that scientific instruments find it hard to trace the chemical. “The palm oil used by Ferrero is safe because it comes from freshly squeezed fruits and is processed at controlled temperatures,” Tapella says in the TV ad, which was filmed at the firm’s factory in the northern town of Alba and was accompanied by full-page ads in newspapers carrying the same message.