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Why cheap chocolate eggs are bad for us – and terrible for poor cocoa farmers Why cheap chocolate eggs are bad for us – and terrible for poor cocoa farmers
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From Belgian chocolate eggs encrusted with salted caramel to foil-wrapped Swiss bunnies, Easter treats have never been so cheap. The supermarket price war that started with everyday staples, such as bread and milk, has spread to seasonal luxuries.From Belgian chocolate eggs encrusted with salted caramel to foil-wrapped Swiss bunnies, Easter treats have never been so cheap. The supermarket price war that started with everyday staples, such as bread and milk, has spread to seasonal luxuries.
The average price of an Easter egg at one of the nation’s big four supermarkets is almost 10% lower than last year, according to Grocer magazine. Many own-brand eggs cost well under a pound. But the arrival of the One Direction Easter egg – its price reduced by a fifth (to 79p) in publicity-seeking tribute to the departure of Zayn Malik – could soon be a hazy memory of 2015. Lack of supply is expected to send the price of chocolate soaring as thousands of poverty-stricken farmers in west Africa abandon poorly paid cultivation of the beans for more lucrative crops or life in the cities.The average price of an Easter egg at one of the nation’s big four supermarkets is almost 10% lower than last year, according to Grocer magazine. Many own-brand eggs cost well under a pound. But the arrival of the One Direction Easter egg – its price reduced by a fifth (to 79p) in publicity-seeking tribute to the departure of Zayn Malik – could soon be a hazy memory of 2015. Lack of supply is expected to send the price of chocolate soaring as thousands of poverty-stricken farmers in west Africa abandon poorly paid cultivation of the beans for more lucrative crops or life in the cities.
The price of cocoa has jumped by 50% in the past two years, prompting some of the world’s biggest confectionery companies to warn of worldwide chocolate shortages by 2020.The price of cocoa has jumped by 50% in the past two years, prompting some of the world’s biggest confectionery companies to warn of worldwide chocolate shortages by 2020.
“In the next five years the price of chocolate will skyrocket, and we should think about it as very much a luxury,” said Alejandro Litovsky, founder of consultancy Earth Security Group. In a recent report, Earth Security forecast a cocoa shortfall of a million tonnes by 2020. This echoes a warning from the world’s biggest cocoa grinder, Swiss listed firm Barry Callebaut, of “potential cocoa shortages in 2020”. Last year Mars and Hershey, which together account for two-thirds of US chocolate sales, increased the prices of their namesake bars, and of the Snickers, Maltesers and Bounty brands.“In the next five years the price of chocolate will skyrocket, and we should think about it as very much a luxury,” said Alejandro Litovsky, founder of consultancy Earth Security Group. In a recent report, Earth Security forecast a cocoa shortfall of a million tonnes by 2020. This echoes a warning from the world’s biggest cocoa grinder, Swiss listed firm Barry Callebaut, of “potential cocoa shortages in 2020”. Last year Mars and Hershey, which together account for two-thirds of US chocolate sales, increased the prices of their namesake bars, and of the Snickers, Maltesers and Bounty brands.
The chocolate industry is reaping the harvest of poor working conditions and rock-bottom prices in the cocoa heartlands of west Africa, a situation that is driving potential farmers out of the industry in droves. Ghana and Ivory Coast alone supply 60% of the world’s cocoa – the crop can mostly be cultivated only in a tropical belt within 20 degrees of the equator.The chocolate industry is reaping the harvest of poor working conditions and rock-bottom prices in the cocoa heartlands of west Africa, a situation that is driving potential farmers out of the industry in droves. Ghana and Ivory Coast alone supply 60% of the world’s cocoa – the crop can mostly be cultivated only in a tropical belt within 20 degrees of the equator.
In the next five years the price of chocolate will skyrocket, and we should think about it as very much a luxuryIn the next five years the price of chocolate will skyrocket, and we should think about it as very much a luxury
In west Africa, cocoa workers scratch a living on small farms, usually no bigger than five hectares. Years of low incomes, uncertainty over land rights and ageing cocoa trees passing their most productive years have shaped an industry ravaged by poverty and child labour. The average farmer in Ivory Coast earns just 6.6% of the price of each tonne of cocoa sold on world markets, according to the Cocoa Barometer 2015, a report by a coalition of campaign groups. Another NGO, the International Labor Rights Forum, estimates that up to 1.5 million children work in the industry because low wages deter adults from taking jobs in cocoa farming.In west Africa, cocoa workers scratch a living on small farms, usually no bigger than five hectares. Years of low incomes, uncertainty over land rights and ageing cocoa trees passing their most productive years have shaped an industry ravaged by poverty and child labour. The average farmer in Ivory Coast earns just 6.6% of the price of each tonne of cocoa sold on world markets, according to the Cocoa Barometer 2015, a report by a coalition of campaign groups. Another NGO, the International Labor Rights Forum, estimates that up to 1.5 million children work in the industry because low wages deter adults from taking jobs in cocoa farming.
With little prospect of being able to support a family on cocoa, young west Africans are opting to plant more lucrative crops, such as rubber, or moving to find work in cities. The average cocoa farmer in Ivory Coast earns $2.07 a day – roughly the same as the cost a single bar of chocolate in that country.With little prospect of being able to support a family on cocoa, young west Africans are opting to plant more lucrative crops, such as rubber, or moving to find work in cities. The average cocoa farmer in Ivory Coast earns $2.07 a day – roughly the same as the cost a single bar of chocolate in that country.
Not surprisingly many farmers working in this £80bn industry have never tasted a square of chocolate – far less a hand-finished Belgian chocolate Easter egg. Last year a video of an Ivory Coast farmer eating chocolate for the first time became an internet sensation.Not surprisingly many farmers working in this £80bn industry have never tasted a square of chocolate – far less a hand-finished Belgian chocolate Easter egg. Last year a video of an Ivory Coast farmer eating chocolate for the first time became an internet sensation.
“Frankly, I do not know what one makes from cocoa beans,” said Ivory Coast farmer N’Da Alphonse, in the video made by Dutch news website Metropolis. “Ohh, it’s nice… very sweet,” he added on tasting a piece of chocolate for the first time.“Frankly, I do not know what one makes from cocoa beans,” said Ivory Coast farmer N’Da Alphonse, in the video made by Dutch news website Metropolis. “Ohh, it’s nice… very sweet,” he added on tasting a piece of chocolate for the first time.
While chocolate is an unknown luxury for Ivory Coast cocoa farmers, growing middle classes in places such as China, India and Brazil are discovering their sweet tooth. These countries are seeing double-digit annual growth in chocolate sales, although consumption is still far lower than in the chocoholic heartlands of Europe and north America. The Swiss remain the world’s biggest chocolate consumers, putting away 12kg each. The UK, in third place (just behind Ireland) gets through nearly 10kg per person.While chocolate is an unknown luxury for Ivory Coast cocoa farmers, growing middle classes in places such as China, India and Brazil are discovering their sweet tooth. These countries are seeing double-digit annual growth in chocolate sales, although consumption is still far lower than in the chocoholic heartlands of Europe and north America. The Swiss remain the world’s biggest chocolate consumers, putting away 12kg each. The UK, in third place (just behind Ireland) gets through nearly 10kg per person.
This soaring demand at a time of faltering supply is forcing up prices. Cocoa now sells on world markets at around $2,700 a tonne, having risen sharply after decades of low prices. Oxfam cocoa expert Frank Mechielsen says price volatility is a big concern for farmers.This soaring demand at a time of faltering supply is forcing up prices. Cocoa now sells on world markets at around $2,700 a tonne, having risen sharply after decades of low prices. Oxfam cocoa expert Frank Mechielsen says price volatility is a big concern for farmers.
John Hawksworth, chief economist at PwC, says cocoa prices could increase further over the next few years as demand grows. But if high prices encourage more planting of cocoa trees, the boom could turn to bust, repeating the volatile cycle of the 1970s and 1980s.John Hawksworth, chief economist at PwC, says cocoa prices could increase further over the next few years as demand grows. But if high prices encourage more planting of cocoa trees, the boom could turn to bust, repeating the volatile cycle of the 1970s and 1980s.
Jonathan Parkman, head of agriculture at UK broker Marex Spectron, argues that talk of an industry in crisis is overdone. While some young Ghanaians are flocking to cities, he says, there are signs that people in the poorer north are willing to move south to grow cocoa. But he sees a pressing need to increase yields, by investing in fertilisers, protecting cocoa trees against disease and growing coconut trees to provide shade. Jonathan Parkman, co-head of agriculture at UK broker Marex Spectron, argues that talk of an industry in crisis is overdone. While some young Ghanaians are flocking to cities, he says, there are signs that people in the poorer north are willing to move south to grow cocoa. But he sees a pressing need to increase yields, by investing in fertilisers, protecting cocoa trees against disease and growing coconut trees to provide shade.
If big chocolate companies spent 1% of their $86m marketing spend on Ivory Coast, they could support half its farmersIf big chocolate companies spent 1% of their $86m marketing spend on Ivory Coast, they could support half its farmers
Litovsky of Earth Security Group points out that while it is possible to step up cocoa production in other parts of the world – especially Brazil, Nigeria and Indonesia – farmers will be under more pressure from the effects of climate change. “We are going into a period of much more volatility and dynamism.” Earth Security Group’s Litovsky points out that while it is possible to step up cocoa production in other parts of the world – especially Brazil, Nigeria and Indonesia – farmers will be under more pressure from the effects of climate change. “We are going into a period of much more volatility and dynamism.”
The chocolate industry says it is taking steps to improve the dismal working conditions of cocoa farmers and stamp out child labour. Cocoa Action, an initiative by the world’s 11 largest chocolate groups, including Nestlé and Mars, aims to support and train 300,000 west African farmers by the end of the decade.The chocolate industry says it is taking steps to improve the dismal working conditions of cocoa farmers and stamp out child labour. Cocoa Action, an initiative by the world’s 11 largest chocolate groups, including Nestlé and Mars, aims to support and train 300,000 west African farmers by the end of the decade.
But campaigners argue that manufacturers and retailers should do much more. “If the five biggest chocolate companies spent 1% of the $86m they spend on marketing on the Ivory Coast, they could train and support half of the farmers there,” Mechielsen says. “Where are the priorities of those companies?”But campaigners argue that manufacturers and retailers should do much more. “If the five biggest chocolate companies spent 1% of the $86m they spend on marketing on the Ivory Coast, they could train and support half of the farmers there,” Mechielsen says. “Where are the priorities of those companies?”
But ultimately, he argues, if farmers’ incomes are to improve, consumers must pay more: “Chocolate is too cheap.”But ultimately, he argues, if farmers’ incomes are to improve, consumers must pay more: “Chocolate is too cheap.”