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EducationWednesday, 27 February, 2002, 14:05 GMT
Lunch Lesson Seven - Ethical businesses
Chocolate on shelf
The chocolate has to fight for shelf space
Chocolate. Each of us scoffs �50 worth of the stuff a year.

What makes us buy one brand over another? Is it the taste? Packaging? Or maybe the marketing.

But do you ever consider where your chocolate comes from and how much the person who produced it was paid?

The Day Chocolate Company wants us to. It produces fair trade chocolate, where the growers who produce the cocoa beans are paid a fair price for their product.

And with Fairtrade Fortnight starting on 4 March, the Day Chocolate Company - which is part-owned by a Ghanaian farmers co-operative - wants us to choose chocolate with a conscience.

Better deal

Chocolate is big business - the UK market is worth �3.6bn a year.

But the cocoa farmers who produce the beans don't see much of that money.


We ensure that their beans are weighed fairly, that they are paid promptly and that they are offered credit facilities if they are in difficulty

Kwabena Ohemeng-Tinyase
Co-op boss
That's why nine years ago a small group of Ghanaian growers got together to fight for a better deal.

They formed a co-operative to collect and sell cocoa for the farmers' benefit.

They called it Kuapa Kokoo, which means "good cocoa farmers" in Twi, the local language. And 35,000 growers are now members.

According to Kwabena Ohemeng-Tinyase, the co-op's managing director, it has significantly improved its members' lives.

Kwabena Ohemeng-Tinyase
Kwabena: Farmers' lives have improved
"We aim to help cocoa farmers organise their trading and empower them," he says.

"We ensure that their beans are weighed fairly, that they are paid promptly and that they are offered credit facilities if they are in difficulty."

But even with the backing of the co-op, a cocoa farmer still earns just �300 a year for their cocoa bean crop.

The farmers realised they had to do more than just grow the beans. They needed to make the chocolate, too.

Cash bonuses

So they now part-own the Day Chocolate Company, which makes bars under the brand names Divine and Dubble.

Divine chocolate
The farmers own a share of the company
Profits from the business are given back to the farmers in the form of cash bonuses and development grants for water wells and schools.

This is all well and good. But the chocolate's ethical credentials don't automatically guarantee it space on your local supermarket shelf.

Fairtrade products are often pricier than other brands, and the Day Chocolate Company is competing against some of the world's biggest corporate giants.

But the company's boss, Sophi Tranchell, reckons there's room for everyone.

Small proportion

"If fair trade products can capture even a small proportion of that market, producers in developing countries gain real benefits," she says.

One of the first stores to stock Divine was the Co-op - itself an organisation which works for the benefits of its members.

The Co-op's Terry Hudghton says that in a fairly static market, Divine has been a big hit.

"Co-op chocolate sales are about 5% up, but Co-op fair trade sales are 95% up," he says. "That's absolutely wonderful."

Ironically very few Ghanaian cocoa growers have even tasted chocolate.

But the Kuapa Kokoo co-operative is hoping our love of chocolate will improve their future.

"We all have to go shopping," says managing director Kwabena.

"Fair trade is just going shopping with a bit of respect."


Student Guide

Just imagine growing cocoa beans in Ghana.

The price you get for your beans depends on what is happening in countries thousands of miles away.

If everyone is feeling well-off, they buy great big Easter eggs, enormous chocolate rabbits and suddenly people want your beans more than ever so the price goes up.

Cocoa beans
Prices are now guaranteed
If things are bad, they just buy mini-eggs to cheer themselves up. It's hard being at the mercy of a faraway market.

It's even harder when big businesses are trying to buy cocoa beans at the lowest possible prices, so growers around the world are undercutting each other to sell their output.

Being a small cog in a global economy is very, very tough.

Divine chocolate tries to create a better situation for the cocoa bean producers, while running an effective business in the developed world.

This is how it helps:

  • Producers receive a guaranteed price for their goods, and the security of long-term trading contracts

  • They benefit from guaranteed minimum health and safety conditions

  • Producers, their workplace and the environment are not exploited

  • Education and training opportunities for producers - especially women and children - are actively fostered

    Just think...

    What effect do you think this strategy has on the growers in Ghana?

    To find out more about how they go about it, have a look at the Divine story, how beans become chocolate and the history of the cocoa industry in Ghana.

    Does the developed world help?

    Would they be better off if they could turn their cocoa beans into chocolate in Ghana?

    You can sell chocolate for a much higher price than cocoa beans - but developed countries tend to have higher import duties on processed products than the raw materials.

    It's much more expensive to bring chocolate into the EU than cocoa beans.

    Just think...

    Why do you think the EU is happy to import chocolate beans but wants to stop chocolate coming in?

    What effect would a change in the level of taxation on imported chocolate have in Europe?

    Why ethical?

    Many businesses claim to look after their stakeholders but few take it to the same lengths as Divine. The Fairtrade organisation encourages businesses to take this approach.

    An increasing number of businesses are winning the Fairtrade logo for their products. It shows that the producers are receiving a fair price for their products.

    The products often cost a little more than others but people are increasingly prepared to buy them.

    Just think...

    Next time you're in a supermarket, find as many products as you can with the Fair Trade logo.

    If you have a chance, ask the manager why they stock them. If you see someone buying them, ask, politely, why they have made this selection.

    Why join in?

    Divine encourages people to make a positive contribution by buying their chocolate.

    They feel that your participation can help to change things - the more Divine chocolate that is sold, the better for the producers in Ghana.

    Just think...

    Have a look at the different ways the company has set up for people to join in?

    What do they suggest? How does it help raise awareness of the issues?

    How does it help Divine?

    Can an ethical approach be a good marketing strategy?

  •  WATCH/LISTEN
     ON THIS STORY
    News image Simon Gompertz reports
    "Sometimes the price is so low it's not worth harvesting the pods"
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