Cocoa Loco
Chocolate is one of those things that bring joy to kids, teens, adults and the elderly. It’s universal. The love for chocolate truly has no boundaries, other than dogs. Most forms of joy also come along with a price tag and as for the cocoa industry, the ones who oversee it all are the Ivory Coast and Ghana.
It’s important to note that these two countries alone control about two thirds of the world’s cocoa trade. Because of this, big companies like Mars, Hershey and Olam have brokered agreements and deals with the two countries to break off a piece of cocoa for their own products.
Recently, Ivory Coast and Ghana authored a letter which said that these major chocolate producers attempted to avoid a $400-per-ton “living income differential” (LID), which is basically just a tax added to the cocoa bought from these countries. This was brokered to lift cocoa farmers out of poverty.
Hershey is one the main companies getting backlash from the countries after being accused of dealing in bad faith and purposely trying to configure strategies to bypass the LID. Authorities have halted Hershey from operating its chocolate sustainability programs in both the Ivory Coast and Ghana.
Interestingly, Hershey’s website indicates that “At Hershey, we envision a world where cocoa farmers and their families are able to live healthy, prosperous lives; where cocoa communities and ecosystems thrive for generations to come.” With that being said, a spokesperson for the company also responded by saying the recent letters were “misleading and unfortunate” and denied all accusations.
Should the mega chocolate companies be doing more?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
