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Chocolate producers and manufacturers at war

02/12/2020
Source : All rights reserved
Categories: Economy/Forex Raw materials

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In 2019, Côte d'Ivoire and Ghana, which focus 60% of their production on cocoa, began negotiations to improve the remuneration of cocoa growers in West Africa. The latter accused several giants including Hershey, Mars and Olam.

According to the two major regulatory institutions, the Conseil du café-cacao (CCC) in Côte d'Ivoire and the Cocoa Board ( Cocobod ) in Ghana, the chocolate giants buy cocoa or cocoa butter without paying the income differential decent (DRD). The DRD is a premium of $400 per ton of cocoa above international prices, in order to increase farmers' incomes. 80% of them live on less than 3 dollars a day according to the World Bank .

In response, authorities in Côte d'Ivoire and Ghana suspended all Hershey certification programs. These make it possible to guarantee “sustainable” production criteria such as the absence of deforestation or child labour. These guarantees are essential to sell chocolate in Europe or North America. Mars is also in the sights of the two countries

The two groups targeted completely deny what they are accused of. With AFP, Hershey regrets a "false press release", the CCC and the Cocobod "compromising essential programs which directly benefit cocoa growers". The Mars Wrigley group, for its part, said it "categorically disagrees" with these allegations and claims to have "been the first major manufacturer to support the DRD". "In addition to our support for the DRD, we have invested more this year in the sustainable development programs of Côte d'Ivoire and Ghana", specifies the multinational. The certification programs are part of a "new approach to increasing farmers' incomes, helping to protect children and preserving forests today", adds Mars.

The income difference came into effect in October amid uncertain demand due to the covid-19 pandemic. Confectioners fear paying a high price for chocolate that they will find difficult to sell afterwards.

The producing countries receive only 5% of the cocoa market estimated at 100 billion dollars when the consuming countries capture 15% just with taxes on chocolate bars.

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