Hershey banned from sustainability programmes in Ivory Coast and Ghana
US confectionery business Hershey has been banned from sustainability projects in Ghana and Ivory Coast, after reports the business bought significant quantities of cocoa on the New York Futures commodities market, writes Neill Barston.
The joint move against the major manufacturer by the Ghana Cocoa Board and Ivory Coast’s Conseil du Cafe-Cacao was confirmed in a letter seen by Confectionery Production – though the business has since responded that it remains committed to its support for farming communities in West Africa.
In the communication signed by the two cocoa bodies respective heads, Yves Brahima Kone and Joseph Boahen Aidoo, its notification to Hershey, which according to industry reports, had purchased up to 30,000 tonnes of cocoa on the Futures Market, said that they had ‘been left with no choice’ but to cancel the confectionery company’s sustainability programmes in light of its alleged trading activity.
The two industry leaders asserted that the decision of the company to buy additional cocoa from the US Futures market – traditionally focused on financial trading rather than physical stock purchase, had undermined its recently established Living Income Differential Scheme. This was instituted with payments of $400 per tonne of cocoa aimed at providing additional support to farmers – many of whom remain significantly below the poverty line.
As recently noted by Ghana’s Cocoa Post, the country’s cocoa crops have been particularly affected by the ongoing coronavirus pandemic. This has reportedly impacted on demand for chocolate, resulting in 15% of the country’s crop remaining unsold at a crucial time amid the introduction of the Living Income Differential designed to support farmers directly. It is believed to be the first time since 1989 that a situation of crops being unsold has arisen.
In a separate, related development, a recent communication addressed to the Cocoa Merchants Association of America, the Ghana and Ivory Coast cocoa authorities expressed further concerns directed towards the Mars confectionery group over an alleged decision to switch suppliers surrounding the Living Income Differential payments – which the business has refuted is the case.
Meanwhile, Hershey issued a response to the situation stating that it is fully participating in the LID for cocoa purchases already made from the 2020/2021 crop, and that it substantially sourced from West Africa. It added that it intended to continue supporting the farmer payment scheme in future years.
A spokesperson said: “Solving the many challenges that Cote d’Ivoire and Ghana face within cocoa production, such as low incomes, poverty, child labor and environmental protection will be possible only through collaboration and cooperation across industry, governments and civil society.
“Industry sustainability programmes, such as ours, are needed to positively impact cocoa-growing communities and we remain ready, willing and able to continue these important program such as child labor monitoring and remediation, farmer training, environmental protection, and childhood nutritional supplements. Our concern is that by cutting off industry sustainability programs, cocoa farmers will be negatively impacted as they will no longer receive the benefits provided by our on-the-ground programs as well as the price premium for certified cocoa.
“We look forward to further discussing this with Cote d’Ivoire and Ghana and to hopefully continue the sustainability programs that are benefiting cocoa farmers today.”
Regarding concerns over its own activities, Mars confirmed that its practices remained consistent with recent purchases, and reaffirmed its pledge to support farmers in West Africa.
A statement from the business read: “Mars Wrigley has not changed its cocoa buying practices to avoid payment of Living Income Differential (LID). We categorically reject any allegation implying that we have. The recent cocoa butter we purchased is a regular, repeat purchase consistent with Mars suppliers and origins used for the past three years.
“We were the first chocolate company to publicly support the LID, and are disappointed that others in the industry have recently chosen different purchasing routes. For cocoa farmers to thrive, all chocolate manufacturers and suppliers should be following our lead by supporting the LID, investing in sustainability programs to protect children and forests and purchasing responsible and sustainable cocoa.”
Confectionery Production approached Ghana Cocoa Board for further comment on its decision to ban Hershey, but it was unavailable at the time of going to press.