It’s Hershey versus West Africa.
After a long back-and-forth between the Ivory Coast, Ghana and Hershey, regulators decided to cancel all cocoa sustainability schemes run by Hershey.
The Ivorian and Ghanaian governments accuse the American chocolate marker of trying to avoid paying a premium that would help alleviate farmer poverty.
Busy? Try the speed read.
The scoop: Hershey is accused of avoiding to pay premiums on cocoa deals that would help alleviate farmer poverty.
Hershey versus West Africa: Hershey denies the allegations. The lvory Coast and Ghana, who make up 2/3 of the world’s cocoa production, are preventing Hershey from using sustainability schemes in West Africa.
These schemes allow brands to market their product (in this case chocolate) as fair-trade, ethical, etc.
A broader point about corporate sustainability: Hershey’s (alleged) loophole attempt is all too common in the age of crony capitalism.
Corporate sustainability seeks long-term profits by aligning business models with healthier environments and more prosperous economies. Working around basic premiums that keep hard-working cocoa farmers out of deep poverty is not a sustainable business model.
Bottom line: West African cocoa regulators are sticking to their guns on this issue. I don’t think they’re bluffing. Recommendation: avoid Hershey products until they provide a more transparent response.
List of popular Hershey products to avoid this holiday season:
- Hershey’s (duh)
- Pay Day
- Jolly Rancher
- York Peppermint
- Breath Savers
- Ice Breakers
- Heath Bar
- The Whatchamacallit Bar
- Take 5
- Milk Duds
- Mr. Goodbar
- Almond Joy
- Kit Kat
- Good & Plenty
- Pirate’s Booty
- Krave Jerky
Dig deeper → 1 min
In a letter addressed to Hershey, the Ivorian and Ghanaian regulators claim Hershey is sourcing ‘unusually large volumes of cocoa on the Intercontinental Exchange’ as a workaround for not paying a living income differential (LID).
The two countries are responsible for producing two-thirds of the world’s cocoa.
The letter also accused the Cocoa Merchants Association of America (CMAA) of ‘condoning and conniving against with American companies against poor West African cocoa farmers”.
Sustainability goes beyond marketing
Corporations like Hershey use sustainability schemes to label their products as ethical or fair-trade certified. Sustainability standards in the region prevent child labor and protected forests from being exploited.
In this case, Hershey sought a loophole. By purchasing cocoa on the ICE Futures, they didn’t have to make purchases directly from these farmers with regulations requiring LIDs. This points to a larger issue about sustainability in corporations.
Sometimes, ensuring sustainability is not the most capitalistic option. Near term gains cannot be prioritized over long term sustainability.
Seeking short term profits runs the risk of crony capitalism over honest capitalism. And crony capitalism propagated the locomotive monopolies in the late 1800s, the credit swap scandals of the late 2000s.
It is critical to hold corporations accountable for their commitments to sustainability efforts. If you go on Hershey’s sustainability section of their website, there is a lot of lip service about their commitment to a purpose-driven work in West Africa. The realities put forth by cocoa regulators simply tell a different tale.
If Hershey can’t come clean about their exploitation of West Africa, what other corporations are hiding behind shady deals?