CHOCOLATE INDUSTRY NEW LOW: Price for cocoa drops by 18.5 % driving West African farmers further into poverty

• A dramatic 18.5% drop in the main crop price of cocoa in Ivory Coast will lead to millions of small holder farmers falling further below the poverty line

• The Ivory Coast main crop cocoa farmgate price has decreased to USD$1,457/mt in 21/22 from USD$1788/mt in 20/21

• This fall in income for cocoa farmers will likely lead to increased inequality and vulnerability including more children working illegally on cocoa farms

• If big chocolate companies were to pay the Living Income Reference Price for all cocoa purchased, it would cost an estimated $1 billion which is only 0.7% of global chocolate revenues1

• Tony’s Chocolonely is calling on all chocolate companies to match the price they pay for cocoa – the Living Income Reference Price (LIRP) – to enable cocoa farmers to earn a living income and drive modern slavery and illegal child labour out of the chocolate industry

• Tony’s Chocolonely pays an additional premium on top of the Fairtrade premium and the Fairtrade minimum price for cocoa – an essential part of enabling farmers to earn a living income.

• For the upcoming 21/22 main crop season this premium will increase from $462 (26% over the farmgate price) to $793 (54% over the farmgate price) per tonne of cocoa to ensure farmers are not impacted by this significant price drop.

4th October: Tony’s Chocolonely, the chocolate makers on a mission to make 100% slave free the norm in chocolate, has launched an urgent appeal to all chocolate companies to match the price Tony’s pay cocoa farmers following a devasting drop in farmgate pricing announced on 1st October.

This price drop in Ivory Coast, the world’s largest cocoa producer, will lead to increased poverty associated with modern slavery and illegal child labour, despite big chocolate companies having pledged for decades to eradicate these labour abuses from their supply chain.2

It is very likely that this reduction in the price of cocoa means chocolate companies will enjoy significantly increased profits, instead of paying the Living Income Reference Price to the farmers producing the cocoa in their bars. When the farmgate price of cocoa dropped in mid-2017 big chocolate companies also made an increased profit.3

This price drop comes after government bodies in Ghana and Ivory Coast attempted to ensure a fairer price for cocoa farmers by introducing the Living Income Differential (LID) of $400 extra per tonne of cocoa. Some of the large chocolate companies responded by avoiding buying cocoa from these regions and bargaining down the overall cocoa price. This resulted in the mid-crop farmgate price being dropped by 25% in April 2021, and now the main crop price has also been dropped by 18.5%.

About 75% of the world’s cocoa comes from West Africa. The NORC Report,4 published in October 2020, estimates that 1.56 million children currently work illegally on these cocoa farms. The Global Slavery Index from 20185 confirms there are a minimum of 30,000 victims of modern slavery on cocoa farms there. The root cause of both illegal child labour and modern slavery is poverty, as cocoa farmers are paid too little for their cocoa.

It is predicted that small holder farmers will lose on average 18.5% of their earnings for the 2021/22 cocoa season, while if big chocolate companies were to pay the Living Income Reference Price for all cocoa purchased, it would cost an estimated $1 billion* which is only 0.7% of global chocolate revenues.* They will pay 18.5% less, while they should be paying 50% more than this new cocoa price to enable farmers to earn a living income.

Tony’s mission

Tony’s Chocolonely is a chocolate company on a mission to make 100% slave free the norm in chocolate, changing the industry from within by raising awareness of the issue, leading by example and inspiring key industry stakeholders to act.

Tony’s is asking consumers to call out this cocoa price drop and asking chocolate companies to pay more, not less, for cocoa: the Living Income Reference Price.

Tony’s Chocolonely voluntarily pays a higher price for their cocoa. They pay an additional premium and a co-op fee on top of the Fairtrade premium to bridge the gap between farmgate price and Living Income Reference Price. The total Tony’s premium paid on top of the farmgate price will increase from $462 (26% over the farmgate price) in 2020/21 to $793 (54% over the farmgate price) per tonne of cocoa in 2021/22 to ensure farmers are not impacted by this significant price drop. Tony’s mission allies including Aldi, Albert Heijn in The Netherlands and Jokolade in Germany, also pay the Living Income Reference Price for their cocoa.

Paul Schoenmakers, Head of Impact at Tony’s Chocolonely, commented, “In 2001 a pledge2 was made by the world’s biggest chocolate producers to end illegal child labour in the cocoa industry. Yet 20 years later, child labour and modern slavery are still systemic in cocoa. Poverty is the root cause of this.

“Low cocoa prices, which have historically supported the profits of large chocolate companies over the livelihoods of small holder farmers, is a step in the wrong direction.

“At Tony’s we have made a pledge to make all chocolate 100% free of modern slavery and illegal child labour. We believe this should be the norm throughout the industry, but we cannot achieve it alone. We invite consumers to choose more consciously and to demand that their favourite chocolate brands pay cocoa farmers fairly. And we call on all chocolate companies to pay the Living Income Reference Price for their cocoa to enable farmers to earn a living income as a crucial step in helping farmers out of poverty.”

Nilufar Verjee, Director of Public Engagement at the Fairtrade Foundation said: “When the price of cocoa falls, cocoa farmers’ livelihoods are in serious jeopardy. If cocoa farmers earned a living income, sufficient to cover the cost of sustainable production as well as everyday expenses like a nutritious diet, children’s education and healthcare, and there were also strong remediation plans in place, the problems facing cocoa famers would decrease.

“For change to occur, deep structural and power dynamics going back decades causing the living income conundrum in the first instance must be rebalanced. Empowered farmers need to be able to raise their voices, have a seat at the table and take decisions about their futures themselves, which is why at Fairtrade we are calling on the industry to work with us to tackle these issues.”

About Tony’s Chocolonely:

Tony’s Chocolonely is an impact company that makes chocolate. Putting social impact before profit — Tony's Chocolonely's vision is to make chocolate 100% slave free. Not just their own chocolate, but all chocolate worldwide.

The company was founded in 2005 by 3 journalists from the Dutch TV show ‘Keuringsdienst van Waarde’ after they discovered that the world’s largest chocolate manufacturers were buying cocoa from plantations that used child labor and modern slavery.

Since then, Tony’s Chocolonely has dedicated its efforts to raising awareness of and eliminating inequality in the chocolate industry. Tony’s Chocolonely leads by example, building direct, long-term relationships with cocoa farmers in Ghana and Côte d'Ivoire, paying them a higher price and working together to solve the underlying causes of modern slavery and child labour.

Tony’s Chocolonely wants to inspire the industry as a whole to make 100% slave free the norm in chocolate. They believe that being a better business should be the norm, not the exception. The brand has grown to become one of the market leaders in the Netherlands and its bars are now available almost worldwide, with offices in the Netherlands, USA, UK, Germany, Belgium and Sweden.

Tony's Chocolonely is a B -Corp and Fairtrade-certified.

For more information,
press@tonyschocolonely.com