Keep KitKat Fairtrade
Thursday, 25 June 2020 | Joanna
In 2010 Nestle announced a partnership with Fairtrade which would eventually mean all KitKat bars in the UK and Ireland bearing the Fairtrade mark. They would source Fairtrade certified cocoa and sugar for the bars under the "mass balance" scheme. This scheme means that a company does not have to switch all its production to Fairtrade, instead it can choose to source a specific amount of ingredients on Fairtrade terms, equivalent to the amount used for a specific product. For example, if Nestle sources 21 tonnes of cocoa in total and a third of its chocolate output is used for KitKats, then we can say that 7 tonnes of cocoa are used in KitKat bars. So sourcing 7 tonnes of Fairtrade cocoa and mixing that with 14 tonnes of unfair cocoa means that any of Nestle's chocolate products might contain some Fairtrade chocolate, but that only KitKats bear the Fairtrade mark. Maltesers are another example of mass balance in Fairtrade sourcing.
Nestle has always been a controversial company - it's one of the most boycotted brands in the world - so the announcement that KitKats would bear the Fairtarde mark was greeted with a level of wariness from some long standing supporters of Fairtrade. Nevertheless over the last ten years almost 27,000 small scale cocoa and sugar farmers have benefited from selling their crops at a guaranteed Fairtrade price as well as around £2m a year in Fairtrade premiums, used by communities wherever they see fit. Farmers own 50% of the Fairtrade brand, meaning their interests are fully protected. This democratic structure is completely absent in the Rainforest Alliance mark, which does have a system of premiums - currently £47.50 per tonne as opposed to £190 with Fairtrade - and the premiums are not given as a cash payment for communities to decide, but often "in kind" and on schemes dictated by buyers.
So the decision that Nestle will switch all its cocoa sourcing to Rainforest Alliance which was announced this week will have a devastating effect on cocoa farmers. Nestle plans to continue to source its cocoa from Fairtrade certified farmers, but without paying the Fairtrade minimum price and Fairtrade premium. The Cote d'Ivoire Fair trade Network has released a statement which can be read in English on the Fairtrade Foundation website. Sugar farmers who currently sell to Nestle will no longer have this market, since all sugar will now be sourced from European sugar beet.
Giving some of the world's poorest people a pay cut in the middle of a pandemic is a particularly unpleasant thing to do. It is a particularly difficult time as farmers are currently spending a lot of their Fairtrade premiums on efforts to stem the spread of coronavirus. And while the west is examining the structural racism that is a legacy of colonialism and the Transatlantic slave trade it's worth remembering that people in West Africa only grow cocoa because Europeans planted the crop there.
So what can we do? Make a noise about it. Post on social media using the hashtag #KeepKitKatFairtrade. Sign Joanna's petition, which is backed by major fair trade organisations.
Please take a stand to support some of the world's poorest farmers and urge Nestle to Keep KitKat Fairtrade.
UPDATE: Thursday 2 July - The petition now has over 225,000 signatures from all over the world. Thank you to everyone who's signed and shared.
Joanna was interviewed by Yorkshire Live - you can read the interview here.
UPDATE; Friday 3 July - Nestle has published this page on its website to deal with the issue.
My comments: Rainforest Alliance is a really good organisation, and for cocoa brands which don't currently have any independent certification for their suppliers, it's a good choice to ensure their farmers are Rainforest Alliance certified. Lots of farms - coffee as well as cocoa - are "triple cert" - Fairtrade, Rainforest Alliance and Organic, and the majority of farmers who currently supply Nestle on Fairtrade terms will already meet Rainforest Alliance standards. From September, Rainforest Alliance will be applying new sustainability standards. This will coincide with Nestle's move to Rainforest Alliance.
However, Nestle is moving away from the more rigorous Fairtrade certified cocoa standards to Rainforest Alliance. Having the same symbol on all your products might be tempting from a branding point of view but it doesn't help the farmers who will be paid less for their work.
"Our aim is not only to make sure farmers receive a fair price for their cocoa but to also make sure that we are tackling key social and environmental issues including child labour and deforestation."
Fairtrade has always been about much much more than paying a fair price to farmers. Tackling social and environmental issues is also at the heart of Fairtrade, and tackling the endemic problem of the worst forms of child labour on West African cocoa farms has always been one of the guiding principles of Fairtrade. Rainforest Alliance's new sustainability standards focus on child labour and deforestation after some criticism about certifications for farms which were encroaching on rainforest (ironically) in Cote d'Ivoire.
"Farmer income is based on some variables that we do not control. This includes the annual price of cocoa, which the Ivorian and Ghanaian governments will only confirm shortly before the new cocoa year begins, as well as the portion of the Fairtrade premium that the farmer receives, as this is decided by each individual cooperative. The amount we spend on pre
miums and investment in additional projects with the farmer cooperatives in the year ahead will significantly exceed the Fairtrade premium we would have paid."
This is the key paragraph for the farmers who will be working with Nestle. With Fairtrade there is a minimum price for cocoa guaranteed at $2,400 per tonne. This has been calculated to cover the cost of production and applies whatever the market price for cocoa happens to be. So if Nestle really wanted to guarantee what price they pay their cocoa farmers they could continue with Fairtrade. Recently the governments of Cote d'Ivoire and Ghana introduced the Living Income Differential which adds $400 per tonne to prices paid for cocoa grown in these countries, regardless of who the buyer is. The money is put into a pot to compensate farmers when the cocoa market price falls. This will mean that the price should be more or less the same as the Fairtrade minimum for the next couple of years, but if there is another collapse like 2017 when prices dropped by 40% this will severely impact farmers.
The Fairtrade premium is paid directly to the farmer who pools it with other cocoa farmers in her community and they decide democratically how their community should best use it. There is no need to explain what they plan to do, to apply for the money. This is their money and Fairtrade understands that they know best how to spend it. The Fairtrade premium is $240 per tonne - 30% higher than the $180 per tonne Rainforest Alliance premium which Nestle says it will be paying. Nestle has committed to extra payments over the next two years but communities need to be able to rely on a steady income long term. What Nestle is proposing feels more like charity than fair trade.