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Should we boycott Oatly?

In recent weeks, Oatly has faced widespread boycott calls, after it was announced that the company had accepted a $200 million investment from Blackstone.


The private equity firm is part owned by Stephen Schwarzman, who is reportedly a donor for Trump, and has been accused of financial links to companies accused of deforestation in the Amazon. 

So should we be boycotting Oatly?


The accusations against Blackstone

In August, Bloomberg published a report which found that Schwarzman - Blackstone’s co-founder and CEO - had donated $3.7 million dollars towards Trump’s 2020 re-election campaign.

The sum was donated via Super Pac America First Nation, an organization that pools campaign contributions from members and donates them to campaigns for or against candidates. 

The report found that Schwarzman was propping up Wall Street giving for Trump’s campaign: the donation single-handedly accounted for three quarters of reported contributions over a 18 month period from individuals associated with the key 31 banks and investment firms dominating America’s finance industry.

Without it, Wall Street giving from those linked to the 31 firms would have declined by 69% from the 2016 cycle

Blackstone has also been linked to companies accused of facilitating Amazon deforestation.

Blackstone owns a stake in Hidrovias do Brasil. This company operates a shipping terminal at Miritituba in the Brazilian state of Pará. 

According to a report in The Intercept in 2019, the terminal has facilitated widespread deforestation of local areas.

“The jungle is being cut by grileiros, or “land-grabbers,” who operate outside the law with chainsaws. The grileiros then sell the newly cleared land to agribusiness concerns, whose harvest is driven on the highway to the [Hidrovias-operated] terminal, before being exported.” 

Indeed, The International Finance Corporation - an affiliate of the World Bank that backed the Miritituba terminal project - has also stated that “the construction of the Miritituba port, close to still-intact areas of the Amazon forest, is likely to lower transport costs for farmers and thereby accelerate conversion of natural habitats into agricultural areas, particularly for soy production.” 

Blackstone has strongly refuted accusations that Hidrovias has also been involved in the development of a road leading to the terminal in Brazil which has been critical for the transportation of deforestation goods and is linked to violations of Indigenous land rights.

In particular, the company emphasises that the road has been operated by the Brazilian government since 1976. It says that Blackstone, “did not build this highway, nor are they paving it.”

Nonetheless, critics claim that:

“Hidrovias has consulted with and helped finance the Brazilian government’s efforts to develop and find funding mechanisms to pave [the highway], maintain the road, and reduce congestion to accelerate its shipments.”


What does the investment mean for Oatly?

Given the racial violence that Trump has incited in the US and the role of deforestation in climate breakdown, it is not surprising that Blackstone’s investment in Oatly has caused concern.

Many have questioned why the manufacturer of plant-based milks has accepted the funding, accusing it of “selling its soul”

The investment represents a 10% stake in the company. However, it does not necessarily mean a shift away from ethics for Oatly itself.

Crucially, as a private equity firm, Blackstone is a passive investor. Unlike shareholders in a publicly traded company, Blackstone therefore does not have any control over the running of the company. 

Oatly themselves say, "We thought that if we could convince [Blackstone] that it’s as profitable (and in the long-term even more profitable) to invest in a sustainability company like Oatly, then all the other private equity firms of the world would look, listen and start to steer their collective worth of 4 trillion US dollars into green investments." However, companies have long suggested the value of taking investments from unethical sources as a way to 'mainstream' sustainability, and it has not transformed private equity yet.

Fall in Ethiscore

As it is only a relatively small holding, Oatly’s score fell only slightly in our table since the investment, still leaving it with a medium score for its non-organic products, and slightly higher for organic.

The brand lost points under Political Activities, due to Blackstone’s political donations and lobbying. 

Blackstone itself when last fully rated lost marks under Environmental Reporting, Climate Change, Pollution & Toxics, Human Rights, Supply Chain Management, Political Activities, Anti-Social Finance and Tax Conduct.

How does Oatly compare?

Oatly remains above many other other plant-based milk manufacturers on our score table

The non-dairy milk market includes several brands with a pretty poor track record. Groupe Danone owns the Alpro, Provamel and Soya Soleil brands.

Danone has been accused of unethical marketing of baby milk formula in China, Indonesia, Turkey and India, which Baby Milk Actions says is putting babies in danger. Baby Milk Action, which runs the DanoNO campaign, also says that the company runs the www.first1000days.ie website, which promotes breastfeeding but which it uses to collect data and target users with adverts for formula

Despite selling plant-based milks, many brands in our non-dairy milk guide are also owned by companies that sell meat and dairy products, including: Sojade, Sojasun, Soya Soleil, Alpro, Provamel, Dream, Isola Bio and Granovita.

Oatly certainly doesn’t seem to be the worst of the bunch. However, we have now caveatted our recommendation of the brand due to the fact that Blackstone has donated millions of dollars to the Republican party in the US.

For some, the fact that some of the profits from your purchase will go to this investor is reason enough to avoid the brand, alongside the other links mentioned above.

Oatly loses court case against UK oat milk maker

Oatly recently attempted to sue a small family business making oat milk in Cambridgeshire, for trademark infringement. Oatly claimed that Glebe Farm’s PureOaty brand name was too close to Oatly and that it used a similar blue packaging. Oatly added that the use of the term “Shake me” next to the cap was similar to the packaging of its own oat milk.

In August, a High Court judge ruled in favour of the UK farm saying he did not see "any risk of injury to the distinctive character" of the Oatly brand.

The cost of legal representation for a small family farm has been huge.

Glebe Farm is an oat farm run by brother and sister team Rebecca and Philip Rayner. You can buy their oat milk from them on their website www.glebefarmfoods.co.uk

They will also be included in our updated non-dairy milk guide in 2022.

The alternative options

If you do decide to boycott Oatly, there are other ethical brands to go for, depending on what milk you want to buy. Our Best Buys are:

Rebel Kitchen, EcoMil, Rude Health and Sproud are also recommended brands.

For more information see our guide to vegan and non-dairy milk.
 

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