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Kraft takeover of Cadbury’s bad for ethics

Sep 11

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11/09/2009 10:55  RssIcon

The proposed takeover of Cadbury’s by Kraft could be a setback for human rights campaigners


Cadbury’s has recently adopted the Fairtrade standard across its high profile Dairy Milk chocolate range. Kraft foods has however hitched its wagon to the less stringent Rainforest Alliance ethical certification scheme, with some Kenco coffees already bearing the mark.

According to Rob Harrison, editor of the magazine, “whilst both schemes offer genuine assurances to consumers concerned about human rights in their supply chains, it is widely accepted amongst campaigners that the Fairtrade standard is more demanding. Perhaps the key difference is that the Fairtrade mark sets minimum acceptable prices for its agricultural commodities. This can make a substantial difference to endemic poverty in producer communities.

Ethical Consumer’s ethiscore website also gives companies a score out of twenty across a much wider range of social and environmental issues. A takeover of Cadbury’s by Kraft would see its score fall from 5.5 to 2.5.

According to Harrison, “Both companies are large multinationals attracting criticism from a wide range of civil society groups, but a fall of three points in our score is probably significant. Cadbury’s likes to talk up its Quaker heritage and claims that this leads to a deeper understanding of its corporate social responsibilities, but evidence of this is now slight. Kraft has also made some significant progress on ethics since its period as part of the Philip Morris tobacco group.

Despite this, we are concerned about the potential this takeover has for an erosion of some of the gains made by ethical consumers. Perhaps one day regulatory authorities looking at mergers and acquisitions will be tasked to consider wider societal impacts when considering approval for major takeovers of this kind.”




2 comment(s) so far...

Re: Kraft takeover of Cadbury’s bad for ethics

I was interested to read the comments and concerns about the potential purchase of Cadbury’s by Kraft. It is unfortunate, however, that you chose to dismiss the Rainforest Alliance certification scheme in the terms that you did. I often find it to be lazy comment to simply state “it is widely accepted amongst campaigners that the Fairtrade standard is more demanding” as Rob Harris did, without citing any evidence.

While Faritrade is an excellent and commendable certification scheme, so to is the Rainforest Alliance and I think your readers should be made aware of that. For a farm to gain Rainforest Alliance certification it needs to meet exacting standards which cover all three of the interlocking elements of sustainability: ethics, environment and economics. These standards are managed by the Sustainable Agricultural Network, a coalition of NGOs in developing countries, and are developed by representatives from southern based NGO’s, farmers groups and academics as well as the Rainforest Alliance. Farms are then independently audited on an annual basis so that consumers who have an interest in the broad social, environmental and economic aspects of sustainability can have confidence that the commodities in a product bearing the “green frog” seal have met these exacting standards.

It was also disappointing that you consider the “minimum acceptable price” to be the only way that you can make a substantial difference to endemic poverty. While the price a farmer receive is important so too is providing that farmer with the skills and knowledge to farm efficiently and sustainably. The Rainforest Alliance is teaching farmers to farm more effectively, growing their bottom line and conserving the fertile soils and natural resources on which their children will depend. Rainforest Alliance certification puts the emphasis on improved farming practices rather than on alternative marketing schemes. Any farmer’s success depends on crop quality, productivity, cost control and sale price. The Rainforest Alliance program addresses all four. Most farmers in the Rainforest Alliance certification program are getting significantly higher prices for their goods than they did before certification and higher than the non-certified market price. But farmgate prices are not a panacea. The system that focuses only on price is missing a number of other critical elements that influence whether or not farmers get out of poverty. Many farmers earn high prices and yet still fail. Successful farmers learn to control costs, increase production, improve quality, build their own competence in trading, build workforce and community cohesion and pride, manage their precious natural resources and protect the environment.

The higher prices that companies are willing to pay for coffee, cocoa and other goods from Rainforest Alliance Certified farms allows farmers to invest in improvements so their farms are more efficient and easier on the environment. Rainforest Alliance also works closely with a number of “green” financing institutions to ensure that farmers have access to soft loans.

At the end of the day what really matters is not a comparison between Fairtrade and the Rainforest Alliance. Rather a recognition that both schemes are credible and important and to turn all our efforts onto the majority of products available which still have no independent certification to prove that farmers, farmworkers and the environment are getting a fair deal.

By Stuart Singleton-White on   12/09/2009 14:35

Re: Kraft takeover of Cadbury’s bad for ethics

Thanks for this Stuart. We have also chosen to reproduced an edited version of this letter in the letters page of the next issue of the magazine (Ethical Consumer number 121) which has a longer article on the Chocolate industry.

By Rob Harrison on   25/09/2009 14:27


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