Cadbury takeover raises doubts over

Kraft'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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 Severin Carrell
 guardian.co.uk, Wednesday 20 January 2010 18.55 GMT

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

Kraft's proposed takeover of Cadbury has raised widespread fears that the

US 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's
executives 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 will
continue after the takeover.
Jack McConnell, the former first minister of Scotland, tabled a motion in the
Scottish parliament urging Kraft to honour the deal while at Westminster,
the Labour MP Mark Lazarowicz put down a similar motion in the
Commons.

Kraft is widely seen amongst development campaigners as being hostile to

the Fairtrade Foundation in particular after it criticised the movement for
only dealing with "an extremely small number" of companies, claiming it
was too small scale for its needs.

Todd Stitzer, Cadbury's chief executive, appeared to bitterly criticise Kraft's

business ethics at a fair trade retail conference last September when
takeover hostilities were in their infancy. Without naming Kraft directly, he
attacked the "unbridled" capitalism of large, heavily indebted firms, and
urged shareholders to keep Cadbury's independent. He said "principled
capitalism [was] woven into the very fabric" of his company. Without it "you
risk destroying what makes Cadbury a great company," he said.
Lazarowicz, a long-standing fair trade campaigner and MP for Edinburgh
North and Leith, said: "It was a major breakthrough when Cadbury agreed
to work with Fairtrade, and it would be a tragedy if that breakthrough was
now to be set at nought."

McConnell, who has close links with the development movement in Africa
and was proposed in 2008 as high commissioner to Malawi, is to contact
campaigners in the US to pressurise Kraft to honour the Cadbury deal and
extend 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 threat
as a result of the takeover," he said. "I've seen with my own eyes the very
positive 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 was
the first mass market chocolate in the world to use Fairtrade cocoa, and
brought the product into 30,000 UK stores.
The foundation has since brokered major deals of supply Starbucks with
coffee and cocoa beans for Nestlé's Kit-Kat bars, and believed Cadbury
was ready to expand its range of Fairtrade-branded sweets. Cadbury's
planned to expand the sale of Fairtrade Dairy Milk to Canada, Australia and
New Zealand.

Kraft insists it supports the principle of sustainability after signing up with

the Rainforest Alliance, which promotes conservation and fair business
dealings with small growers, to supply some coffee beans for its Kenco and
other brands.

But Oxfam has accused Kraft of undermining attempts to treat small

farmers fairly, defending the fairtrade scheme as "the only system that
guarantees farmers a price that allows them a good return [whilst] at the
same time working towards a sustainable future."

A Fairtrade spokeswoman confirmed that the London-based foundation

had made contact with Cadbury soon after Kraft's offer was accepted, to
ensure that their contract would be honoured. "We've had a very productive
relationship 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 sold
by Ghana to 15,000 tonnes. The foundation said after Kraft's offer was
accepted 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, and
taking it further in coming months and years."