Nestlé, the global food giant, announced that, starting in 2010, its Kit Kat bar in the UK will be made with fairtrade chocolate. In doing so, Nestlé is following the example set by Cadbury earlier this year. According to the BBC, Nestlé sells about 1 billion Kit Kats a year in the UK. The beneficiaries of this move will be the cocoa farmers in the Côte d’Ivoire who stand to receive hundreds of thousands pounds as a result of the decision as estimated by Harriet Lamb of the UK’s Fairtrade Foundation.
So everybody should be happy, right? Not so fast. A number of critics have called the decision of the Fairtrade Foundation to award the fairtrade label to Nestlé a mistake. They point out that Nestlé has generated more boycotts among consumers than any other food company. They feel that the label simply whitewashes corporate malfeasance. For a summary of the arguments check Fairtrade London. For the US reaction, check the ILRF.
The debate is important because it raises the question to what extent large corporation should ever be allowed the carry the fairtrade label. Inevitably, only a small part of whatever the corporation produces will be certified fairtrade. The rest–in the case of Nestlé, the small Kit Kats–will continue to be sourced according to standard procedures. For the corporation, the benefit is immense. Sporting the label on one line of products will generate consumer goodwill for the entire corporation. That’s a great deal.
But was does that do for the fairtrade label? As happened with the organic standard, fairtrade is reduced to a lifestyle choice, simply a means to satisfy another market niche, another brand. And that’s not what the originators of fairtrade hoped for. The hoped for a better deal for all farmers in the Global South. If Nestlé were serious about changing its practices, it should announce that it will source all its cocoa, sugar and coffee from fairtrade suppliers. Then we’d know the corporation stands for real change, not just window dressing. But we’re not going to see that anytime soon.
We also must ask about the motivation of the labeling organizations. Should they not worry about the entire product chain and palette of a corporation? Certifying a small segment of a large corporation’s product chain leaves these organizations open to justified criticism that they are only interested in receiving licensing fees rather than promoting a different global trading order.
Some other key facts. This only involves Nestlé’s 4-bar KitKat in the UK and Ireland and so just 1% of Nestle’s cocoa purchase.
The cost of the Fairtrade premium for this cocoa is less than £400,000 according to Fairtrade Foundation figures. Nestlé is currently spending £43 million promoting Nescafé coffee in the UK. So for less than 1% of this sum it has gained global media coverage, most of which suggests it is making a significant contribution to improving lives in Ivory Coast, when, in reality, it is part of the problem for failing to deliver on its promise to end child labour and slavery in its cocoa supply chain by 2006.
Not only that, it has the UK Minister for Trade and Development defending it at the UN when questioned on Nestlé’s record in developing countries.
Not a bad return on its investment.
See:
http://boycottnestle.blogspot.com/2009/12/nestle-kitkat-minister.html