cadbury takeover raises doubts over kraft

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Cadbury takeover raises doubts overKraft's business ethics

� Fairtrade Dairy Milk chocolate bars were launched in July 2009� Campaigners see Kraft as being hostile to fair trade movement

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y Severin Carrell

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guardian.co.uk, Wednesday 20 January 2010 18.55 GMT

Cadbury's launch of Fairtrade Dairy Milk Chocolate Bar tripled the amount of fairlytraded, cocoa sold by Ghana to 15,000 tonnes. Photograph: Tom Stockill/PR

Kraft's proposed takeover of Cadbury has raised widespread fears that theUS food group will abandon a landmark deal by the British confectioner to

buy only Fairtrade cocoa beans for its Dairy Milk brand.The Fairtrade Foundation has begun urgent talks with Cadbury'sexecutives to see if the company's agreement to buy all its cocoa beans for Dairy Milk direct from the foundation's farmer-led co-operatives willcontinue after the takeover.



Jack McConnell, the former first minister of Scotland, tabled a motion in theScottish parliament urging Kraft to honour the deal while at Westminster,the Labour MP Mark Lazarowicz put down a similar motion in theCommons.

Kraft is widely seen amongst development campaigners as being hostile tothe Fairtrade Foundation in particular after it criticised the movement for only dealing with "an extremely small number" of companies, claiming itwas too small scale for its needs.

Todd Stitzer, Cadbury's chief executive, appeared to bitterly criticise Kraft'sbusiness ethics at a fair trade retail conference last September whentakeover hostilities were in their infancy. Without naming Kraft directly, heattacked the "unbridled" capitalism of large, heavily indebted firms, and

urged shareholders to keep Cadbury's independent. He said "principledcapitalism [was] woven into the very fabric" of his company. Without it "yourisk destroying what makes Cadbury a great company," he said.Lazarowicz, a long-standing fair trade campaigner and MP for EdinburghNorth and Leith, said: "It was a major breakthrough when Cadbury agreedto work with Fairtrade, and it would be a tragedy if that breakthrough wasnow to be set at nought."

McConnell, who has close links with the development movement in Africaand was proposed in 2008 as high commissioner to Malawi, is to contact

campaigners in the US to pressurise Kraft to honour the Cadbury deal andextend it to the US.

"There have been concerns expressed for many years that Kraft has never shown any enthusiasm for fair trade and therefore this must be under threatas a result of the takeover," he said. "I've seen with my own eyes the verypositive impact that fair trade has on individuals and communities across

Africa."

Cadbury's decision to rebrand all its Dairy Milk bars with the Fairtrade

logo last year was seen at the time as the movement's biggest coup: it wasthe first mass market chocolate in the world to use Fairtrade cocoa, andbrought the product into 30,000 UK stores.The foundation has since brokered major deals of supply Starbucks withcoffee and cocoa beans for Nestlé's Kit-Kat bars, and believed Cadburywas ready to expand its range of Fairtrade-branded sweets. Cadbury's



planned to expand the sale of Fairtrade Dairy Milk to Canada, Australia andNew Zealand.

Kraft insists it supports the principle of sustainability after signing up withthe Rainforest Alliance, which promotes conservation and fair business

dealings with small growers, to supply some coffee beans for its Kenco andother brands.

But Oxfam has accused Kraft of undermining attempts to treat smallfarmers fairly, defending the fairtrade scheme as "the only system thatguarantees farmers a price that allows them a good return [whilst] at thesame time working towards a sustainable future."

A Fairtrade spokeswoman confirmed that the London-based foundationhad made contact with Cadbury soon after Kraft's offer was accepted, toensure that their contract would be honoured. "We've had a very productiverelationship and this landmark switch has come about as a result of it; of course we would like it to continue, and at some point see further switches," she said.

Cadbury's deal tripled the amount of fairly traded, higher value cocoa soldby Ghana to 15,000 tonnes. The foundation said after Kraft's offer wasaccepted by Cadbury's board that it believed the success of the deal"presents a unique and compelling case for continuing to pursue the

Cadbury commitment to their Cocoa Partnership and to Fairtrade, andtaking it further in coming months and years."

cadbury takeover raises doubts over kraft

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