Ivory Coast’s cocoa regulator, Conseil Cafe Cacao (CCC), has called out leading chocolate makers for refusal to pay the Living Income Differential (LID), a $400-per-tonne premium.
West African neighbours and the world’s top two cocoa producers, Ivory Coast and Ghana introduced the LID in 2019 and accepted by cocoa traders and chocolate manufacturers.
The premium which comes down to $25 per 64kg bag of cocoa beans is purposed to help raise the earnings of millions of cocoa growers living on an average daily wage of 45 cents ($0.45).
However, Reuters News reported on Friday 18 June 2021 that a draft letter by the CCC had mentioned some companies including Mondelēz International as circumventing payment of the LID “by offering a negative country differential – normally a premium of 70 to 150 pounds ($99-$212) per tonne to reflect the quality of Ivory Coast’s beans.”
This reported incident will not be the first the West African’s may be dealing with on the back of the premium’s introduction.
It will be recalled that just about 3 months into the LID’s implementation Ghana and Côte d’Ivoire red-flagged some activities by traditional buyers of their cocoa that they deemed suspicious.
But Mondelēz has denied the allegation insisting it was paying the LID in full, adding in a statement to Reuters that it “does not offer or have any influence over negative country differentials.”
“In recent weeks, when we have seen an upturn in economic activity and therefore in demand, the major groups have refused to pay the LID,” an unnamed CCC contact said.
“(We will) stop all the sustainability and certification programs of Mondelez that are ongoing with Cargill, and all the other exporters,” added the official at CCC who asked not to be identified.
“Unlike Hershey, this time we are going to be tough on chocolate makers who want to bypass the LID. For us this is unacceptable,” the CCC official warned.