Ghana and Ivory Coast have reportedly canceled all cocoa sustainability schemes run by U.S-based chocolate manufacturing giant, Hershey.
This according to sources is due to the refusal of the chocolate company to pay the living income differential (LID) fee imposed by the two countries.
The $400 per tonne poverty alleviation fee imposed by Ghana and Ivory Coast on their produce in 2019 is to be paid directly to millions of poverty-stricken cocoa producers to help the farmers in their line of work.
But in a letter addressed to Hershey, the cocoa regulators for Ivory Coast and Ghana accused the chocolate manufacturing giant of sourcing unusually large volumes of physical cocoa on the ICE futures exchange in order to avoid the payment of the Living Income Differential (LID) fee.
Among other things, the two countries also accused Blommer, a subsidiary of Fuji Oil Holdings of aiding Hershey and barred all third party companies from running sustainability schemes in the West African nations on behalf of Hershey.
Again, Ivory Coast and Ghana also said they are reviewing their membership of the Federation of Cocoa Commerce (FCC), a UK-based international organisation that aims to promote, protect and regulate the cocoa trade.
Replying to the accusations, Hershey, the makers of Hershey chocolate bars, Hershey’s Kisses, and Kit Kat, said it is fully participating in the LID and will continue to do so.
According to the company, the majority of cocoa it buys would continue to come from “West Africa and would include the LID for the 2020-2021 crop and beyond.”
“Our concern is that by cutting off industry sustainability programs, cocoa farmers will no longer receive the benefits provided by our programs, (like) the price premium for certified cocoa,” the company added in its statement.