Chocolate pricing

Tony’s Chocolonely calls on chocolate makers to match the price they pay cocoa farmers after 18.5% price drop in West Africa – Retail Times


Tony’s Chocolonely, the chocolatier on a mission to make 100% slave-free chocolate the norm, has made an urgent appeal to all chocolate companies to match the price Tony’s is paying cocoa farmers following a devastating drop producer prices announced on October 1.

This drop in prices in Côte d’Ivoire, the world’s largest cocoa producer, will lead to increased poverty associated with modern slavery and illegal child labor, despite large chocolate companies having promised for decades to eradicate these labor abuses from their supply chain.

It is very likely that this reduction in the price of cocoa means that chocolate companies will benefit from a significant increase in profits instead of paying the benchmark price of living income to the farmers producing the cocoa in their bars. When the producer price of cocoa fell in mid-2017, the big chocolate companies also increased their profits.

This drop in prices comes after government agencies in Ghana and Côte d’Ivoire attempted to ensure a fairer price for cocoa farmers by introducing the Living Income Differential (LID) of an additional $ 400 per tonne of cocoa. Some of the big chocolate companies have responded by avoiding buying cocoa from these regions and negotiating down the overall price of cocoa. This resulted in a 25% drop in the mid-harvest farm gate price in April 2021, and now the main crop price has also fallen by 18.5%.

About 75% of the world’s cocoa comes from West Africa. The NORC Report, published in October 2020, estimates that 1.56 million children are currently working illegally in these cocoa plantations. The 2018 Global Slavery Index5 confirms that there are at least 30,000 victims of modern slavery in the cocoa plantations there. The root cause of illegal child labor and modern slavery is poverty, as cocoa farmers are paid too little for their cocoa.

It is expected that smallholder farmers will lose an average of 18.5% of their income for the 2021/22 cocoa season, while if large chocolate companies were to pay the living income benchmark price for all cocoa purchased, this is would cost around $ 1 billion, which is just 0.7% of global chocolate revenue.1 They will pay 18.5% less, when they should pay 50% more than this new cocoa price to allow farmers to earn a living.

Tony’s mission

Tony’s Chocolonely is a chocolate company with a mission to make 100% slave-free chocolate the norm, changing the industry from the inside out by raising awareness, leading by example and inspiring key players in the industry. industry to act.

Tony’s calls on consumers to denounce this drop in the price of cocoa and on chocolate manufacturers to pay more, not less, for cocoa: the Living Income Reference Price.

Tony’s Chocolonely voluntarily pays a higher price for its cocoa. They pay an additional premium and cooperative fees on top of the Fairtrade premium to close the gap between the farm gate price and the living income benchmark price. Tony’s total premium paid on top of the farm gate price will drop from $ 462 (26% above the farm gate price) to $ 793 (54% above the farm gate price) per tonne of cocoa in 2021 / 22 to ensure that farmers are not affected by this significant drop in prices. Tony’s mission allies, including Aldi, Albert Heijn in the Netherlands and Jokolade in Germany, are also paying the Living Income Reference Price for their cocoa.

Paul Schoenmakers, Impact Manager at Tony’s Chocolonely, commented: “In 2001, the world’s largest chocolate producers pledged to end illegal child labor in the cocoa industry. Yet 20 years later, child labor and modern slavery are still systemic in cocoa. Poverty is the cause.

“Low cocoa prices, which have historically supported the profits of large chocolate companies at the expense of the livelihoods of small farmers, are a step in the wrong direction.

“At Tony’s, we are committed to making all chocolates 100% free from modern slavery and illegal child labor. We believe this should be the norm across the industry, but we can’t do it alone. We invite consumers to choose more consciously and demand that their favorite brands of chocolate pay cocoa farmers fairly. And we call on all chocolate companies to pay the living income benchmark price for their cocoa to enable farmers to earn a living income, a crucial step in helping farmers lift themselves out of poverty. “

Nilufar Verjee, Director of Public Engagement at the Fairtrade Foundation, said: “When the price of cocoa drops, the livelihoods of cocoa farmers are seriously threatened. If cocoa farmers earned enough income to cover the cost of sustainable production as well as daily expenses like a nutritious diet, education and child health care, and there were also strong remediation plans in place, the problems that cocoa farmers would face would diminish.

“For change to occur, the deep structural and power dynamics dating back decades, which gave rise to the living income conundrum in the first place, must be rebalanced. Empowered farmers must be able to make their voices heard, have a seat at the table and make their own decisions about their future, which is why at Fairtrade we call on the industry to work with us to resolve these issues.