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Finance & Innovation

KitKat Scraps Partnership With Fairtrade in ‘Profoundly Disappointing’ Move

Why Global Citizens Should Care
The UN’s Global Goal 8 for decent work targets economic growth where everybody gets the benefits of entrepreneurship and innovation. That’s always been the aim of Fairtrade too, ensuring producers in poorer countries get a fair deal from powerful international conglomerates. But this announcement threatens that objective. Take action here to fight extreme poverty and stand for economic empowerment for everyone.

Nestlé announced plans on Tuesday to end the partnership between its KitKat brand and the Fairtrade Foundation, a nonprofit organisation that protects the livelihood of producers in developing countries.

The UK arm of the multinational Swiss corporation has decided it will end its decade-long affiliation despite warnings from Fairtrade that thousands of farmers would be harmed by the move.

From October, Nestlé will source the cocoa for its KitKats from farms working with the Rainforest Alliance instead — a similar charity that focuses more on biodiversity than workers’ interests.

It means that £2 million will be lost in Fairtrade premiums every year, affecting 27,000 small-scale producers in Malawi, Fiji, and Côte d'Ivoire. The premiums are not just about income either, but also help fund community projects like schools, public kitchens, and women’s empowerment programmes.

Nestlé has said that the decision has nothing to do with saving money, according to the Guardian, and will not change the amount it spends on cocoa farmers over the next year.

It also stated that it will offer financial support for farmers to switch from Fairtrade to the Rainforest Alliance, and will invest in more initiatives to support farmers and communities.

The conglomerate defended the move as simplifying their sustainable sourcing work, since brands like Aero and Yorkie are already certified with the Rainforest Alliance too.

But Michael Gidney, Fairtrade’s chief executive, described the news as “profoundly disappointing.”

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“It would never be good news, but to face this when the country is looking at one of the worst health crises imaginable makes things particularly difficult,” Gidney said.

“Nestle’s relationship with farmers in Ivory Coast has been able to make a huge difference to village communities, helping them to receive electricity and water pumps,” he added. “The decision is a huge blow.”

Meanwhile, the chairman of the Ivorian Fair Trade Network, representing farmers across Côte d'Ivoire, pleaded with Nestlé to reconsider: “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.”

Related Stories March 7, 2018 Sainsbury’s Warned to Stop Current Advertising for ‘Fairly Traded’ Tea — Because It’s ‘Misleading’ Customers

One key difference between Fairtrade and the Rainforest Alliance is minimum pricing: while Fairtrade negotiates with farmers to ensure workers get a stable income that guards them against fluctuations in the market, the Rainforest Alliance does not offer a minimum bracket, focusing on improving productivity instead.

It follows a wider pattern of large international corporations abandoning Fairtrade in favour of its own certification programmes with self-defined idea of fairness, noted to have started when Sainsbury’s — the largest retailer of Fairtrade products in the world — decided that its own brand teas would instead sport its own “Fairly Traded” label, a move described as “misleading” by the UK’s advertising watchdog.

What might appear innocuous on the surface was actually predicted to affect 250,000 farmers and workers in some of the world’s poorest countries, including Malawi, Kenya, Rwanda, and Uganda. Then confectionery company Mondelēz, which owns Cadbury, pulled Dairy Milk from Fairtrade — and organisations across the world, including Nestlé, began to follow.