Ferrero stops buying palm oil from Malaysian company Sime Darby

by Mei Mei Chu

KUALA LUMPUR (Reuters) – Italian confectionery giant Ferrero said it would stop sourcing palm oil from Sime Darby Plantation after the United States found the Malaysian planter used forced labor.

Working conditions in this Southeast Asian country have been the subject of particular attention for the past two years. US customs thus banned imports of products from six companies, including Sime Darby.

Palm oil, the most widely used vegetable oil, is a key ingredient in Ferrero Rocher chocolates and Nutella spread. It gives them a creamy texture and ensures a long shelf life.

“On April 6, we asked all our direct suppliers to no longer supply Ferrero with palm oil and palm kernel oil indirectly sourced from Sime Darby, until further notice,” Ferrero told Reuters by email, adding that he was not buying directly from the Malaysian company.

Although Ferrero buys relatively little edible oil from Sime Darby – 0.25% of its volumes – its decision follows similar moves by Cargill, Hershey and General Mills, which could jeopardize Sime Darby’s position as a leader in sustainable production of palm oil.

Sime Darby told Reuters the company had taken action on human rights.

(French version Elena Vardon)