Cadbury Announces Plans for first Social Premium Disbursement

Cadbury, the latest convert to fairtrade, announced on Monday its plans for disbursing the first installment of its social premium. The funds, £500,000 ($751,215), will be invested in projects determined by the farmer cooperatives that supply the cocoa. One of the beneficiaries, the Kuapa Kokoo cooperative, will use its share to improve health services for its members through the deployment of mobile clinics and farmer extension services.

A quick refreshers. The social premium of $150/ton is, in my opinion, the most important aspect of the fairtrade arrangement. The premium is paid even if the market price is above the $1,600 floor price guaranteed by fairtrade. It provide funds for community based improvements, ranging from water pumps or toilets, to broader social services such as schools or the mobile clinics proposed by Kuapa Kokoo.

Cadbury’s decision to adopt the fairtrade certification and to include more of its product lines has quadrupled the amount of fairtrade cocoa exported from Ghana and thus quadrupled the amount of social premium paid. Cadbury fairtrade products are currently available in the Britain, Ireland, Canada, New Zealand and Australia.

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4 thoughts on “Cadbury Announces Plans for first Social Premium Disbursement

  1. Randy H

    This seems like a PR move on Cadbury’s part, acting as if they’re disbursing extra funds, or supporting specific projects. As I understand it, cooperatives vote how to spend the funds, and they funds are really just part of the total sale price. Cadbury’s really milking the PR around this whole thing. I haven’t seem another company with fairtrade certification self-promote…your thoughts? Sure it raises awareness and thus hopefully enlists peer companies to go fairtrade but their commitment is limited and they’d do well to expand it before tooting their horn more.

  2. Michael Post author

    Not quite. The social premium not necessarily part of the sales price. In Ghana it is separate. Since the COCOBOD is the sole exporter, the fairtrade exporter (Cadbury) pays the agreed upon sales price to the COCOBOD, but the social premium is transferred directly to the cooperative. For Kuapa Kokoo, that is the Kuapa Kokoo Farmers Trust.

    Of course, it is PR for Cadbury, what else. But it is a large amount of money and Cadbury has committed to fairtrade. The large U.S. corporations won’t even touch fairtrade.

  3. Randy H

    Fairtrade premium is a required part of Fairtrade contracts, Every company with Fairtrade pays it. That was my point. Cadbury seems to be capitalizing on PR a bit much. They would be best off increasing their Fairtrade purchases, as Kuapa says it does not sell the majority of its cocoa as Fairtrade. There s need and room for Cadbury and others to grow their commitment, and perhaps then more PR is warrante?

  4. Michael Post author

    I agree, they can and should do more. Expand their fairtrade commitment beyond the UK, for example. But now that they are part of Kraft, I don’t see that happening. It shows how local knowledge of fairtrade makes a difference. In the UK awareness of fairtrade is much higher than in the U.S. and the result is that when faced with certification options, fairtrade is the key option in the UK while the wide variety of options in the U.S. dilutes that effort.