Nestlé ceases sourcing Fairtrade cocoa and sugar for KitKats

Co-operatives in Côte d’Ivoire, Fiji and Malawi will lose their Fairtrade premiums

KitKat bars sold in the UK and Ireland will no longer be produced using Fairtrade cocoa and sugar. The company will use cocoa certified by the Rainforest Alliance from October 2020.

Nestlé’s decision to stop sourcing from Fairtrade-certified farmers will affect 27,000 small-scale producers from co-ops in Côte d’Ivoire, Fiji and Malawi, who will lose £2m in Fairtrade premium each year.

Paid on top of the selling price, the Fairtrade Premium enables farmers or workers to invest in projects of their choice. In recent months the premium has been used to cope with the impact of Covid-19. Farmers and their co-operatives have been able to buy protective equipment, distribute hand-sanitisers, raise awareness and support families struggling due to illness.

According to Fairtrade, all future purchases of sugar will be from European sugar beet producers, meaning cane sugar farmers will not only lose the Fairtrade Premium, but could lose access to market to sell their sugar. Future purchases of cocoa may be from the same co-operatives, but only as part of Nestlé’s own Cocoa Plan initiative, eliminating the Fairtrade Premium.

Cocoa farmers were informed about the decision at a joint meeting in May. 

Writing on behalf of Ivorian cocoa farmers, Atse Ossey Francis, chair of the Ivorian Fair Trade Network, said: “It is with deep regret and deep concern that we have learned that after proudly producing cocoa for KitKat in the UK for a decade, small cocoa farmers in Côte d’Ivoire will no longer enjoy the benefits of selling their cocoa on Fairtrade terms.

“Nestlé is one of the leading buyers of Fairtrade-certified cocoa through its KitKat brand and we are grateful for all this decade of partnership where we have contributed to the success of Nestlé. A non-Fairtrade trade relationship means regression and continued poverty. 

“We invite Nestlé to continue negotiating with us producer representatives and the Fairtrade label in order to find ways of agreement so as to reconsider their decision not to buy on Fairtrade terms. We ask Nestlé to continue the incredible work that has been done over the past 10 years so as not to cut the lifeline of the Fairtrade Premium at a time when we producers need it most!”

Fairtrade pays US$240 per tonne of cocoa in Premiums, more than any other independent cocoa certification scheme.

“Fairtrade is 50% owned by producers,” said Mr Francis “giving us power to make our own decisions for our organisations, families and communities, giving us the opportunity to raise the voice of small producers. As Fairtrade producers, our voice is heard and taken into account. We are treated with the respect and dignity we deserve. Stopping the relationship with Fairtrade is to silence our voices.”

Related: Concern as Sainsbury’s replaces Fairtrade with its own Fairly-traded certification

Michael Gidney, CEO of the Fairtrade Foundation, said: “Fairtrade exists to represent farmer voices, standing beside them as they fight for their rights. We stand behind farmers as they applaud the benefits of the decade-long partnership with Nestlé and as they ask Nestlé to reconsider this course of action at this time.

“Now, more than ever, we need to act as a global community and take actions that are steps forward as we build a better future. As many businesses are scaling up commitments to Fairtrade, more farmers are benefiting from the uniqueness of Fairtrade and more shoppers in the UK are able to choose from around 1,000 different Fairtrade chocolate varieties.  

“We urge Nestlé: listen to farmers, do not choose this moment of global crisis to exacerbate the inequalities in the cocoa industry. Be part of the solution and keep KitKat Fairtrade.”

Nestlé says the decision to source Rainforest Alliance-certified cocoa for its KitKat brand from October 2020 was determined by its drive to invest more in sustainably sourced cocoa and harmonise certification for confectionery products within its global portfolio. The company says it will provide financial support to enable Fairtrade farmers to certify their farms to the Rainforest Alliance Sustainable Agriculture Standard as well if they wish. The food giant already uses Rainforest Alliance certified farmers on other bars such as Aero and Yorkie.

Nestlé says it will invest £1m in a living income pilot and a further £500,000 in community projects, as its partnership with the Fairtrade Foundation ends. Trough the living income pilot, Nestlé will provide direct, conditional cash transfer to farming households and co-ops for making clear progress in the areas of good agricultural practices, re-forestation, child labour and alternative incomes.

Simon Billington, global technical manager for Nestlé Confectionery, said: ”Our expanded partnership with the Rainforest Alliance underlines our commitment to sustainable cocoa sourcing throughout our global supply chain.

“We are aware that the move will have an impact on some farmers, and we are working hard to mitigate this. Nestlé will be maintaining the same level of cocoa spend for the 2020-21 season. We will be investing in a series of initiatives to support farmers and our cocoa growing communities over the next two years, including £1m to develop an industry-first living income pilot and a further £500,000 on community projects.

“We want to continue working with our Fairtrade farmers and we will pay for them to get to the level required by the UTZ standard, which since 2018 has been part of the Rainforest Alliance certification programme. If farmers are not able to do this in time for the next crop, we will also provide them with financial support for the coming year.

“Our successful partnership with Fairtrade is ending as we harmonise our certification for sustainable sourcing internationally. Over the last 10 years, Fairtrade and KitKat have supported cocoa farmers in the Cote d’Ivoire. We are grateful to the Fairtrade organisation and proud of the work that KitKat has supported with them.  

“The Rainforest Alliance has significant experience working with cocoa farmers in understanding and implementing robust sustainability criteria that drives positive change, and we look forward to deepening our collaboration in the coming years.”

Alex Morgan, chief markets officer at Rainforest Alliance, said: “We’re delighted Nestlé is strengthening its position in the cocoa sector and unifying its responsible cocoa sourcing commitment across all of its portfolios. This announcement comes at an exciting time for the Alliance having just released a new seal and due to publish the new, improved Sustainable Agriculture Standard this month.

“Our certification programmes continue to connect companies, consumers, farmers and businesses committed to protecting the health of ecosystems, workers, and communities by using social and market forces to protect nature and improve the lives of food producers.”

Responding to the Nestlé’s announcement, the Co-operative Party has launched a petition calling on the company to reverse their decision and keep KitKats Fairtrade. “Fairtrade ensures farmers can trade their way out of poverty, ensuring a fair minimum price for their produce and providing them with a Fairtrade Premium that funds community projects like schools and health centre,” reads the petition.