Big cocoa mergers pose risk to farmers and sector, growers say

Fri Mar 27, 2015 1:57pm EDT
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* Last years have seen spate of mergers and acquisitions

* Farmers worry deals will reduce their bargaining power

* Resulting lower farmer prices could lead growers to quit cocoa

By Joe Bavier

ABIDJAN, March 27 (Reuters) - A spate of corporate mergers between major cocoa and chocolate players risks reducing farmers' choices and bargaining power, lowering incomes to levels that could threaten the sector's future, growers and campaigners said on Friday.

Mergers, either completed or under way, in recent years include the fusion of Cadbury and Mondelez, Archer Daniels Midland's sale of its chocolate arm to Cargill and its cocoa business to Olam International.

Swiss agricultural commodities trader Ecom Agroindustrial Corp is also purchasing Britain's Armajaro Holdings' coffee and cocoa trading arm, and Barry Callebaut AG bought Petra Food's cocoa ingredients business.

"We could face a kind of monopolistic situation that would have an impact on the farmgate price," Edmond Konan, executive secretary of the World Cocoa Producer Association (WCPA), said on the sidelines of an International Cocoa Organization meeting.

The WCPA, which represents farmers from nine cocoa producing nations, was recently created to lobby for the interests of growers and represent them in dialogue with the industry.   Continued...