Chocolate


Ethical shopping guide to chocolate bars, chocolate snacks and gift chocolates from Ethical Consumer.

Ethical shopping guide to chocolate bars, chocolate snacks and gift chocolates from Ethical Consumer.


This is a product guide from Ethical Consumer, the UK's leading alternative consumer organisation. Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.

This guide includes: 

 

  • ethical and environmental ratings for 99 brands of bars of chocolate, chocolate snacks and gift chocolates. 
  • Best Buy recommendations
  • Child labour in the cocoa industry
  • Palm oil
  • Vegan chocolate
  • Spotlight on Divine

 

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Image: Viviani

 


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Last updated: June 2018 

 

 

 

 

Chocolate: the bitter and the sweet

 

A couple of years ago, you may remember reading about how cocoa was imminently running out. Prices were about to skyrocket. Some prudent newspapers advised their readers to start hoarding chocolate. 

Well, that didn’t happen. The opposite happened. Last year the market became awash in a sea of excess cocoa, which wiped a third off the market price. 

For the world’s 5 million cocoa farmers this was a disaster. This statement, quoted in a recent report, has been echoed by many elsewhere: “the price decline of cocoa will de facto erase all of the sustainability gains that have been achieved in the past ten years”. Prices have since started rising again, but they are still pretty low. 

 

Image: cocoa pods

 

Cocoa farmers are almost all extremely poor. Cocoa can only be grown in tropical countries, and it is almost entirely grown by smallholders. The bulk of production is in West Africa, with Ivory Coast – the biggest exporter – producing 43% of the world’s supply. Ghana is in second place, and produces about 20%. 

  

Child labour

 

It is now nearly twenty years since the Western media first started talking about child labour in West African cocoa production, including forced labour. The Harkin-Engel Protocol, in which companies promised to tackle the issue, was signed in 2001. Child labour reports, sustainability projects and 2020 targets abound. 

Despite this, there is scant evidence of significant progress. There are still estimated to be about two million children working on cocoa farms in West Africa. There is particularly profound concern about it because it is such hazardous work – cocoa pods are split with machetes, toxic chemicals are used, and the children carry extremely heavy loads. Injuries are extremely common. 

As forced labour goes on underground, it is harder to get reliable information on it and nobody agrees on how much there is. However, while most of the child labour is family labour, a small proportion of it is still generally believed to be children trafficked from Mali or Burkina Faso: neighbouring countries which are even poorer than Ivory Coast and Ghana. 

Anti-Slavery International says that: “the more sensational phenomena publicised in European and North American media in the 1990s and 2000 (children being kept locked up and physically mistreated), are rare”. However, what appears to be more common than overt violence is various forms of deceit: for example, children accepting transport to cocoa farms on the back of promises about well-paid work, and the payment never materialises.

 

 

Deforestation 

 

In the last year, everyone has started talking about another issue in cocoa production: deforestation.

About 117,866 hectares of forest in Ivory Coast was cleared between 2001 and 2014, and a similar amount in Ghana. A substantial amount of it has been replaced with cocoa trees. This is not nearly on the scale of palm oil, which is believed to be responsible for the loss of about 340,000 hectares every year. But it is still serious. About 40% of Ivorian cocoa – which is about 17% of the global cocoa market – is believed to come from inside officially protected areas, which technically makes it illegal.

This is having tragic effects on local wildlife, including the beautiful and critically endangered pangolin (a pangolin is basically an anteater crossed with a suit of armour). Chimpanzees and elephants – Ivory Coast’s national symbol – have also almost disappeared.

 

Image: deforestation in cocoa production 

 

There is no need to rip up any new land to produce cocoa – yields in West Africa are less than a third of what could be achieved. The main reason for the deforestation is poor farming practices; farmers who have stripped the soil of its fertility can get a short-term boost by moving onto recently deforested land.

 

The underlying cause – poverty

 

What all of the analysts seem to agree on is one thing: the key underlying cause of both the child labour and the deforestation is desperate poverty. 

Since the 1980s, the average (inflation adjusted) cocoa price has halved. Even before the recent price collapse, cocoa farmers’ average incomes were less than half of the $2.40 per day deemed the cut off for ‘extreme poverty’ in Ivory Coast.

As a result, hiring sufficient adult labour is effectively impossible for many cocoa farmers, and they resort to using (largely their own) children. Poverty is also the main cause of poor farming methods, leading to land degradation and the need to move into the forests for a cheap short-term fix. 

The situation is a vicious circle – if there was no possibility of anyone using children the cocoa price would rise to pay for adult labour. And while poverty has led farmers into the forest, the ensuing glut in supply has helped to cause the low prices that perpetuate it. In other words, simply policing child labour and deforestation will tend to raise the cocoa price. 

But of course, that isn’t simple, because the Ivorian government has no resources. The low cocoa price isn’t helping: in April 2017, the President said that because of the price fall and ensuing reduced tax intake, the government was cutting budgets across the board by 10%.

Someone is making good money out of the low prices. The Cocoa Barometer (a report published every three years by a global NGO consortium including Oxfam and the International Labor Rights Forum) calculated that chocolate companies paid US $4.7 billion less for their cocoa this year than the year before. If you didn’t notice the price of chocolate going down, that would be because it didn’t.

 

The rise of the cocoa sourcing certification standards 

 

The media attention on child labour has led to a major rise in the proportion of cocoa that is certified by a third-party standard, from 2% a decade ago to about a quarter today. It is still growing fast as companies push towards their 2020 targets. UTZ is by far the most popular, followed by Rainforest Alliance, and then Fairtrade. (UTZ and Rainforest Alliance are merging but, for the time being, they are still separate standards). There is also a small amount that is certified organic. 

We have given extra Product Sustainability points on our score tables to brands that are 100% organic, Fairtrade, UTZ, Rainforest Alliance or Value-added-st-source). 

Any form of external auditing makes it more likely that the worst practices, especially illegal ones, will be picked up on. We therefore consider some form of certification to be a minimum requisite for chocolate companies buying from West Africa. 

 

Infographic: cocoa sourcing 

 

Third party certification schemes Fairtrade

 

As the name suggests, Fairtrade is about fair trading. In particular it aims to tackle price volatility, which is very dangerous for small farmers who have very little ability to insure themselves against risks. Fairtrade thus guarantees farmers a minimum price, and a fixed premium on top. In the case of cocoa, the minimum price is $2000/tonne cocoa, and the premium is $200/tonne. Some labour and environmental standards are also incorporated into the standard, but prices were always at the centre. 
 

 

UTZ and Rainforest Alliance

 

UTZ and Rainforest Alliance, on the other hand, just aim to police how production is done. They thus have no floor price or fixed premium, although UTZ does ask the buyer and seller to negotiate a premium to cover the certification cost. This premium has been falling and, in 2017, it averaged about $100/tonne cocoa – half of Fairtrade’s.

On the other hand, Rainforest Alliance, being more of an environmental scheme, tends to be stronger on environmental protection. It has an outright ban on deforestation of any kind, while UTZ and Fairtrade only do so in the case of ‘primary’ (old growth) forest. This may matter as, in Ghana and Ivory Coast, 92% and 90% of forests respectively are ‘secondary’ forests.

None of the schemes seem very good at protecting workers’ wages. Although cocoa farmers are almost entirely smallholders, most of them do employ a few workers, at least at labour-intensive times of the year. These workers are some of the most marginalised people in the supply chain, and frequently get paid below the minimum wage. Fairtrade does not regulate wages if the smallholder employs less than a “significant number” of workers, generally reported to mean 20. UTZ and Rainforest Alliance do officially demand that they are paid the legal minimum wage, but research suggests that it often still doesn’t happen.

 

 

Companies’ in-house certification schemes

 

Most of the major chocolate companies now also have their own sustainability programmes. These include Mondelz’ (Cadbury) ‘Cocoa Life’, Nestlé’s ‘Cocoa Plan’, Hotel Chocolat’s ‘Engaged Ethics’, and the Lindt & Sprüngli ‘Farming Program’. 

The main purpose of these is to invest in cocoa-growing communities by helping with training, equipment and infrastructure. In itself, that is a noble goal, although the Cocoa Barometer points out, rather caustically, that the hundreds of millions being spent on these projects pales into insignificance compared to the US $4.7 billion it calculates that the companies saved on cheaper cocoa this year. 
And, furthermore, in many cases these schemes are not just being touted as complements to third-party standards, but as replacements for them. Cadbury made headlines in 2016 when it announced that it was going to replace Fairtrade certification on its chocolate with its own in-house ‘Cocoa Life’ certification. 

Consumers might fairly wonder what is being promised by a bar of chocolate being ‘Cocoa Life’-certified, and how that is being audited. The answer is that it is very unclear. The Fairtrade Foundation inputted into the scheme’s creation and FLOCERT, which audits for Fairtrade, is supposed to audit it. But there is no information available about what it is supposed to be auditing for, or the results. 

Hotel Chocolat’s scheme also seems quite nebulous. There is no mention of auditing criteria. While the company makes vague claims about paying over the market price, the example figures it gives on its website are 10 years old, making it impossible to judge what this means.

 

 

The better company schemes

 

There are two schemes that do clearly include auditing, and are slightly more transparent: Nestlé’s and Lindt’s.
Nestlé’s includes auditing by the Fair Labor Association for compliance with Nestlé’s Code of Conduct. The code forbids child and forced labour, and deforestation of both primary and secondary forest. It requires all workers to be paid the minimum wage. Lindt’s is audited by The Forest Trust for compliance with Lindt’s Code of Conduct, which also forbids child and forced labour, and regulates wages. It is vague on forests. Both schemes (particularly Nestlé’s) have been praised by NGOs for their work on child labour. Both produce publicly available audit reports. 

However, there is another major problem with all these company schemes – even Nestlé’s and Lindt’s (possibly not Hotel Chocolat’s, but it is impossible to say without more information) – which is their lack of action on prices. 

The companies argue that instead of artificial price supports, a better way to increase farmers’ income is to help them improve agricultural practices so that they can increase yields, and so this has been their primary focus. (Most of them make no bones about the fact that it is also a way of ensuring their cocoa supply. They describe it as a “win-win” for themselves and the farmers). 

Improving agricultural practices has got to be a good idea, especially in light of the deforestation issue. However, company sustainability schemes have also been partially blamed for the recent price collapse by helping to flood the market with too much cocoa. In a market full of destitute farmers, simply promoting increased production without coupling it with other measures is extremely problematic.

 

 

Cocoa certification schemes are not enough

 

The consensus across campaigning organisations, and even now among quite a lot of industry representatives, is that all of this is inadequate. 

A recent paper commissioned by the Dutch government argues that “farmers need both a major price increase for their cocoa and a substantial increase in productivity in order to make a decent living out of cocoa.”

Even Fairtrade’s price supports are minimal. During the recent price collapse, the cocoa price dropped below $2000/tonne, very briefly, for the first time in a decade. But at all other times, the market price has been between $2200 and $3500, so Fairtrade’s $2000/tonne minimum price hasn’t been doing anything (farmers receive whichever one is higher). The $200/tonne premium, meanwhile, while not nothing, is clearly not huge. Fairtrade is reviewing these prices at the moment, and it is to be hoped that it will raise them. 

But Fairtrade is the only scheme that directly addresses pricing, even minimally. The others rely exclusively on policing, training and small infrastructure investments. While these may help, nobody seems very convinced that they are going to really change the game. 

 

 

Commodity agreements

 

Given this, some people are calling for a more radical solution, such as governments agreeing to regulate the supply of cocoa. This is not an unprecedented idea: a number of such international commodity agreements existed prior to the neoliberal era. A particularly successful one was the International Coffee Agreement (ICA) which was based on national quotas and kept the price of coffee high until its demise in 1989. To an extent, this agreement was a product of the cold war: a key reason importing countries (particularly the US) agreed to only allow coffee imports that carried the ICA stamp was the threat of poor coffee-producing counties turning to communism if they didn’t get thrown some bones. However, it demonstrates what is possible. 

It is also theoretically possible that companies themselves could make an agreement. The cocoa market is extremely concentrated. There are three traders (Barry Callebaut, Cargill, and Olam) which buy 75% of the cocoa in the world. The top six manufacturers (Mondelz,

Mars, Nestlé, Hershey’s, Ferrero and Lindt) have 40% of the manufacturing market. And most chocolate is sold in supermarkets, of which there are only a handful. This concentration gives these companies a disturbing degree of power, but it does open the possibility of benevolent as well as malevolent coordination: if they all agreed to pay higher prices they would no longer need to worry about being undercut. Neoliberalism does not smile on cartels that fix prices, and such an agreement might be illegal. However, its grip is weakening sufficiently that people are at least starting to talk about the idea. Of course, the companies would also need to be motivated to do it – no trivial matter. 

 

 

Direct trade and value added at source

 

The International Labor Rights Forum recommends buying from chocolate companies who buy directly from farmers, as that not only means that you know where the cocoa is coming from but, by cutting out the multiple layers of middlemen, it makes it more likely that farmers will receive a better wage. Madécasse has got itself certified ‘direct trade’ on this basis, meaning that it buys directly from farmer. Divine is 45% owned by cocoa farmers themselves, meaning that they are intimately connected with the company, and get a 45% share on any distributed profit. We recommend buying from these companies. 

Another possibility worth looking at is the ‘value added at source’ business model, which is a more structural response. 

As described above, poverty plays a fundamental role in every negative aspect of the cocoa supply chain. It is, in turn, linked to oversupply, which is exacerbated by a lack of alternative employment opportunities in cocoa-producing communities. And while the cocoa farmer only gets about 3-7% of the final chocolate price, about 40% of it is taken at the manufacturing stage, which is invariably done in the rich world.

There are a few companies that are trying to create more money and employment for local people in cocoa growing countries by making it at source instead. Only about 1% of UK chocolate is made this way, but we looked at two companies who do so – Chocolaterie Robert (Chocolat Madagascar), based in Madagascar, and Pacari in Ecuador. These companies are eager to point out the difference that their model makes. Fairtrade, they say, means that the cocoa producing country gets an extra 5-10%, whereas their model means that it gets about an additional 400%. 

Madécasse, also based in Madagascar, has also been based on this model until recently, although it has been having problems with production, so, for the time being, it is making its chocolate in the developed world. However, it hopes to get its Madagascan factories up and running again soon. 

It is a shame that you can’t buy chocolate fully made in West Africa in the UK, but while there are a few companies who make it and sell it locally, we don’t know of any options to buy it over here. 

And unfortunately, it may not be easy for this model to catch on widely. Value-added-at-source chocolate tends to be expensive, and there are good reasons for that – it is much harder and more expensive to make chocolate in hot climates and transport it in finished form. One problem is that it melts.

 


 

 

Vegan chocolate companies

 

These companies are dairy free: Pacari, Moo Free, Madécasse, Booja Booja, Plamil and the Raw Chocolate Company.

 

 

What is ‘raw’ chocolate?


‘Raw’ chocolate has become a bit of a phenomenon recently. 

Chocolate is produced in several stages, the first of which involves the farmers laying out the cocoa beans and fermenting them in the sun. After that, they are transported to be roasted and ground. The roasting helps to develop the normal chocolate flavour, and also sterilises the beans. In the case of raw chocolate, the roasting stage is forgone, giving a different flavour.

 

 

Palm oil scores

 

Chocolate itself does not generally contain palm oil. However, fillings such as biscuit commonly do, so we rated all of the companies on their palm oil policies. 

These companies are palm oil free: Chocolaterie Robert, Pacari, Moo Free, Madécasse, Divine, Booja Booja, Seed and Bean, Montezuma, and the Raw Chocolate Company. 

These companies got our best rating for palm oil, but are not palm oil free: Ferrero, Vivani, Plamil, M&S, Mars, Waitrose and Windmill Organics (Biona). Ferrero, however, also lost half a mark in the palm oil column due to criticism from Greenpeace.

 

Table: palm oil policies chocolate 

 

 

 

 

Company behind the Brand

 

Divine is 45% owned by the Ghanaian Kuapa Kokoo cocoa farmers co-op, a syndicate with about 65,000 members who together produce about 5% of Ghanaian cocoa. Kuapa was created in the 1990s with the help of Christian Aid, The Body Shop and Twin Trading – the company behind Cafédirect’s coffee. It launched Divine Chocolate in 1997 with some additional help from Comic Relief, who promoted it in the UK in a series of TV adverts starring Ben Elton. 

The company’s chocolate is made in the Netherlands, but nearly all of its cocoa comes from Kuapa. As well as a share of any distributed profits, farmers get an additional 2% of the company’s turnover which is invested in Kuapa’s programmes.

The remainder of Divine is now mostly owned by Twin Trading, with a small amount owned by Oikocredit, a Dutch microfinance institution.

 

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