MPs urge Nestle to rethink end of Fairtrade KitKat

 A cross party group of MPs recently met with Nestle to urge them to reconsider their decision to end their relationship with Fairtrade.

During the recent meeting of the All Party Parliamentary Group for Fairtrade, MPs put their concerns to Nestle that their decision to switch cocoa sourcing from Fairtrade to Rainforest Alliance would put some of the world’s poorest cocoa farmers and workers’ livelihoods at risk, at a time when the Coronavirus means they can least afford it. 

Although Nestle argued that schemes would be in place to mitigate the impact to cocoa farmers, they admitting that sugar farmers would definitely be worse off under their decision to source UK beet sugar instead of sugar cane from overseas. 

During the virtual meeting MPs made clear that they remained unconvinced by Nestle’s decision to stop sourcing on Fairtrade terms for their iconic KitKat brand, over fears that it would result in poorer incomes and conditions for some of the world’s lowest paid, instead urging them to reconsider the move and to remain Fairtrade.

Nestle confirmed that the move from Fairtrade to Rainforest Alliance accreditation will see Ivorian farmers paid a lower payment for their cocoa, from the Fairtrade Premium of $240 a tonne, to $180 a tonne, on top of the market price. Nestle suggested in the short term other payments and projects would make up the difference, but there was a lack of clarity over whether these payments and projects will still leave farmers with less money, and how long they will last beyond the next 2 years.

In addition to concerns that farmers will be less well off financially, MPs of all parties expressed strong concern over the ability that farmers will have to decide on the use of funds. Under the Fairtrade system, farmers and their co-operatives have full control over how the $240 Fairtrade Premium is spent. However, Nestle told MPs that only one third of the new $180 payment will be under the full control of farmers. MPs believe that farmers should be able to decide how to spend money they have earnt from their sales.

Labour MP Holly Lynch, co-chair of the APPG on Fairtrade, said: “Both Nestle and Fairtrade have benefited from their partnership over the years. We are concerned that Nestle’s decision to stop sourcing Fairtrade cocoa for KitKats will knock consumer confidence in the brand, which we are all keen to avoid. British shoppers have grown used to KitKats guaranteeing equity and prosperity for the producers who create the chocolate that we love. We are asking Nestle to think again, especially given the global economic uncertainty caused by the Coronavirus Pandemic. At the very least, we would like to see Nestle delay this process to safeguard the producers who have been integral to the company’s long-term success.’

Conservative MP Jason McCartney, co-chair of the APPG, “Nestle’s move is against the wishes of farmers who will be left with less money under their own control and without the clear commitments to future income that they have benefited from under Fairtrade. Nestle should think again. It also needs to be much more transparent about the detail of their new proposals”.

SNP MP Stuart McDonald stressed the negative impact that this decision could have on Nestle’s image, stating “KitKat’s move away from Fairtrade accreditation is a huge blow for the cocoa producers affected, their incomes and the degree of control they have over their own lives and their communities.  The arguments from Nestle appear weak, and this could have a negative impact on their own brand too.  Even at this late stage, I’d urge Nestle to think again”.

MPs also questioned the depth of the consultation process that Nestle ran with cocoa farmers before announcing their decision. Nestle acknowledged that many farmers expressed ‘concern’ and ‘regret’ about their plan to end the sourcing of Fairtrade cocoa, but claimed that overall their decision to continue working with Nestle showed that they were happy with their relationship. However, Nestle’s high buyer power and the farmers’ weak position to seek an alternative buyer raised a concern that farmers will not have been able to meaningfully query the decision.

 The APPG plans to make further calls on Nestle to share a full multi-year financial breakdown allowing the detail to be properly understood, as well as greater clarity over the decision making powers that farmers and co-operatives will have under the proposed move.

The APPG is also calling on Nestle to engage with sugar farmers affected and as a minimum, to provide additional financial support to farmers for the transition period.