Is it a Fairtrade break for Kit Kat?

Nestle says it cannot make more of its products Fairtrade as there is simply not enough Fairtrade cocoa about. Only 2% of the world's supply of cocoa is certified Fairtrade.

Ivory Coast cocoa growers

As the old stocks of four-finger Kit Kats get eaten, all new ones will be made using about 5,000 tonnes of Fairtrade chocolate from the Ivory Coast.

But the four-finger Kit Kats make up just 25% of the one billion Kit Kats sold each year. Kit Kats account for 23% of Nestle's confectionary business, which is part of its food and beverage section that itself accounts for less than half the company's turnover.

That makes the Fairtrade element of Nestle's empire tiny. Nestle says it would need 10,000 tonnes more Fairtrade cocoa just to make the two-finger Kit Kat range Fairtrade. And as more cocoa gets certified that is what Nestle says it will do. That should give Fairtrade cocoa a fillip. That is a good thing.

But arguably Nestle has the power to do much more. It could, if it wanted, speed the transition to Fairtrade of not just cocoa but coffee - it owns Nescafe, the biggest coffee brand in the world.

Divine intervention

The problem is that it is more likely to throw its weight around, at the expense of the wholly Fairtrade chocolate firm Divine. Already Divine cannot afford to pay supermarkets to put Divine bars in prime positions. And the likes of Tesco will remove Divine products to favour bigger names or own brand chocolate.

Divine has a unique ownership structure. From the outset its 99 ordinary shares were owned by three parties; 52% by the Fairtrade NGO Twin Trading, 33% by Kuapa Kokoo farmers co-operative that actually grows the cocoa, and 14% by the Body Shop.

In July 2006 when the Body Shop was being bought by L'Oreal - a company without an "ethical" trading history - it donated its shares in Divine to Kuapa Kokoo. International development finance institution Oikocredit bought 12% of the shares, giving the cooperative a 45% stake in the business.

Comic Relief

In addition, the international NGO Christian Aid also owns preference shares. Comic Relief also supports Divine and is a partner in the Dubble Fairtrade chocolate bar.

The board of directors includes two people from Kuapa Kokoo - the managing director and the Farmers' Union president - two people from the NGO Twin Trading and one person each from Oikocredit, Christian Aid and Comic Relief.

Divine says publicly: "The overall strategic aim of Divine Chocolate is to improve the livelihood of smallholder cocoa producers in West Africa."

Declaration of interest

I should declare an interest. I know the managing director of Divine, Sophi Tranchell, so maybe I am biased. But I think there is a world of difference between a multinational giant such as Nestle, with one Fairtrade product, and a co-operatively owned firm running for the benefit of African cocoa growers.

The Fairtrade Foundation, which awards Fairtrade status, argues that by only accrediting individual products (all 35 of Divine's products are certified Fairtrade), they are not giving a "greenwash" to companies that otherwise have activities that might raise concerns.

"Fairtrade is only for one product. It doesn't blanket the whole company. It actually raises awareness of what the rest of the company is up to," a Fairtrade Foundation spokesman said. Perhaps.

Some more Fairtrade than others?

It seems to me that there ought to be an official way of distinguishing between Fairtrade companies and those that for the bulk of their business are not Fairtrade. Given the vociferous campaigns against Nestle over baby milk, that becomes even more important for ethical firms.

It is Fairtrade Fortnight from 22 February to 9 March. Perhaps that would be a good time to highlight this issue.

Links (new windows)

Nestle on Fairtrade
Divine Chocolate
Fairtrade Foundation chocolate products
Baby Milk Action