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Ghana and the Ivory Coast have canceled all cocoa sustainability plans led by the US-based chocolate manufacturing giant Hershey.
This, according to sources, is due to the refusal of the chocolate company to pay the vital income differential rate (LID) imposed by the two countries.
The poverty alleviation fee of $ 400 per tonne imposed by Ghana and Côte d’Ivoire on their products in 2019 will be paid directly to millions of poverty-stricken cocoa farmers to help farmers in their line of work.
But in a letter to Hershey, cocoa regulators in Côte d’Ivoire and Ghana accused the chocolate-making giant of sourcing unusually large volumes of physical cocoa on the ICE futures exchange to avoid paying the Spread Fee fee Living Income (LID).
Among other things, the two countries also accused Blommer, a subsidiary of Fuji Oil Holdings, of helping Hershey and banned all third-party companies from executing sustainability plans in West African nations on Hershey’s behalf.
Again, the Ivory Coast and Ghana also said they are reviewing their membership in the Federation of Cocoa Trade (FCC), a UK-based international organization that aims to promote, protect and regulate the cocoa trade.
In response to the allegations, Hershey, the makers of Hershey chocolate bars, Hershey’s Kisses and Kit Kat, said that they are fully participating in LID and will continue to do so.
According to the company, most of the cocoa it buys would continue to come from “West Africa and include the LID for the 2020-2021 harvest and beyond.”
“Our concern is that by cutting the industry’s sustainability programs, cocoa producers will no longer receive the benefits that our programs provide, (such as) the premium for certified cocoa,” the company added in its statement.
