Nestle to Make Fairtrade KitKats in U.K., Ireland (Update1)
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By Thomas Mulier
Dec. 7 (Bloomberg) -- Nestle SA, the world’s biggest food company, will start certifying some KitKat bars in the U.K. and Ireland as Fairtrade, following Cadbury Plc, which started producing mass-market Fairtrade chocolate this year.
KitKat four-finger bars will carry the moniker from January, the Vevey, Switzerland-based company’s U.K. unit said in an e-mailed statement released today. Cadbury switched its Dairy Milk brand to Fairtrade in the U.K. in July.
Chocolate makers in the U.K. sold 28 million pounds ($46 million) of Fairtrade chocolate in the U.K. last year. The share of Fairtrade in that market will rise to 10 percent in 2010 because of Nestle and Cadbury’s changes from 1 percent in 2008, said Eileen Maybin, a spokeswoman for Fairtrade in the U.K. The Fairtrade designation requires chocolate makers pay an extra $150 per ton of cocoa and guarantee a minimum price of $1,600 a ton, she said. The extra money is used for development projects.
KitKats make up about 23 percent of Nestle’s U.K. confectionery sales. A quarter of that is the four-finger bars, which had U.K. sales of 43 million pounds in 2008, Nestle said. The price of the Fairtrade KitKats will be the same, Andrew Lewin, an external communications official for Nestle, said by phone. Nestle sells about 250 million four-finger KitKats in the U.K. each year, he added.
Nestle plans to provide 12 million stronger, more productive cocoa trees to farmers over the next decade. The company has said it will spend 460 million Swiss francs ($456 million) on cocoa, coffee science and “sustainability” projects over the next decade.
Mars Inc., Cadbury’s largest rival, said in April that all cocoa it uses will be sustainably sourced, with the approval of the Rainforest Alliance, by 2020. The Rainforest Alliance is a U.S.-based group that certifies goods have been produced from farms that meet its social and environmental standards.
Kraft Foods Inc. has bid 10.3 billion pounds ($16.8 billion) for Cadbury.
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