Rumors Fly That Green & Black’s Wants Out Of Kraft

Several sources recently reported that the British chocolate company, Green & Black’s wants to buy out of Kraft. Cadbury bought Green & Black’s in 2005 for an estimated $37.1 million. Kraft bought Cadbury last year. The Financial Times reported that Green & Black’s is “now considering a separate ownership structure, with a management buy-out, or partial MBO.” The Independent reported that “it is understood that the organic brand is looking at a number of options to secede from Kraft, including a partial management buy-out.”

Craig Sams, the founder of Green & Black’s, told The Independent, “I would love to take [Green & Black's] back and I know a number inside would also.” He added, “I don't think Kraft want to sell. I'm not telepathic but the indications are that they want to hang on to Green & Black's.”

There is one catch to Green & Black’s buying out Kraft. As The Financial Times put it, “It is understood that Kraft rejected a preliminary proposal at the end of last year.” Sams himself said, “Kraft has a lot to digest with Cadbury, but my feeling is they probably want to hang on to Green & Black’s.”

Market Watch quoted Michael Clarke, president of Kraft Foods Europe, who said in a statement, “Here in Europe, we will continue to invest behind growing and optimizing the entire chocolate portfolio.”

Trevor Bond, who heads Kraft Foods’ country business in Europe, said, “Green & Black’s is £40m out of a £1bn chocolate business [in the UK]. I would sell more Creme Eggs.”

Green & Black’s commitment to fair trade chocolate

Green & Black’s pledged to make all of its products fair trade certified by the end of 2011. The company’s Facebook page states that its “entire range of products worldwide is now fair trade certified.” The company started in 1991 and created its first fair trade candy bar in 1994.

Trafficking of children who are forced to work on cocoa plantations in West Africa is a major problem, as the documentary, The Dark Side of Chocolate shows. West Africa accounts for 70 percent of all cocoa grown in the world. Although there has been a three percent annual increase in demand for chocolate over the past 100 years, and the current global market value of the annual cocoa crop is $5.1 billion, West African farmers still earn little for cocoa.

There are over 4.5 million chocolate farmers worldwide, and two million of them are in West Africa. In the the Ivory Coast cocoa represents over 50 percent of the household income. In 2002, the average West Africa cocoa farm earned $30 to $110. For every dollar spent on chocolate, a farmer earns a penny.

Through the fair trade system, cocoa farmers receive at least $.80 a pound for non-organic cocoa and $.89 pound for organic cocoa. If the world price is more than the Fair Trade floor price, cocoa farmers receive $150 per metric ton above the world price.