Cadbury an Ethical Company Struggles to Insure the...

yale case 07-039 november 27, 2007 (revised august 24, 2008) Cadburyâˆâ€" An Ethical Company Struggles to Insure the Integrity of Its Supply Chain Sumana Chatterjee1 Jaan Elias 2 Chocolate had always been considered an affordable little luxury, associated with romance and celebrations. Therefore in 2000 and 2001, revelations that the production of cocoa in the Cà ´te d’Ivoire involved child slave labor set chocolate companies, consumers, and governments reeling. In the United States, the House of Representatives passed legislation mandating that the FDA create standards to permit companies who could prove that their chocolate was produced without forced labor to label their chocolate â€Å"slave-labor free.† To forestall such labeling, the†¦show more content†¦(based in Minneapolis), and Nestle USA (in Glendale, CA, a subsidiary of the Swiss food giant). World prices for cocoa climbed during the 1970s, encouraging further plantings of cocoa trees. In addition, there was a flexible supply of migrant labor from adjacent countries and plentiful land not already under cultivation. During the 1980s, Cà ´te d’Ivoire became the larges t cocoa producer in the world; the country’s share of world production grew from 23 percent in 1980 to 40 percent by 1998. In the mid-1990s, cocoa contributed 35 to 40 percent of Cà ´te d’Ivoire’s exports, 14 percent of its GDP, and more than 20 percent of the government’s income. The increasing volume of production occurred during a declining world market for cocoa. Prices began falling in the 1980s and yet the Cà ´te d’Ivoire government continued to offer high price guarantees. Finally in 1990, the marketing board went bankrupt and appealed to international lending bodies for assistance. The government was forced to halve the producer price to better reflect world prices and help the government repay loans that it incurred while it was supporting the price of cocoa. This meant that Cà ´te d’Ivoire’s farmers received a smaller percentage of the declining world price of cocoa than farmers in any 4 other country. In the 1990s, the p olitical situation also deteriorated. Following the death of Fà ©lix Houphouà «t-Boigny, political tensionShow MoreRelatedCadbury an Ethical Company Struggles to Insure the Integrity of Its Supply Chain9806 Words   |  40 Pagesyale case 07-039 november 27, 2007 (revised august 24, 2008) Cadburyâˆâ€" An Ethical Company Struggles to Insure the Integrity of Its Supply Chain Sumana Chatterjee1 Jaan Elias 2 Chocolate had always been considered an affordable little luxury, associated with romance and celebrations. Therefore in 2000 and 2001, revelations that the production of cocoa in the Cà ´te d’Ivoire involved child slave labor set chocolate companies, consumers, and governments reeling. In the United States, the HouseRead MoreMarketing Mistakes and Successes175322 Words   |  702 PagesStarbucks, we have moved Entrepreneurial Adventures up to the front of the book. We have continued Marketing Wars, which many of you recommended, and reinstated Comebacks of firms iii iv †¢ Preface rising from adversity. I have also brought back Ethical Mistakes, because I believe that organizations more than ever need to be responsive to society’s best interests. Altogether, this 11th edition brings seven new cases to replace seven that were deleted from the previous edition. Some of the cases Cadbury an Ethical Company Struggles to Insure the... yale case 07-039 november 27, 2007 (revised august 24, 2008) Cadburyâˆâ€" An Ethical Company Struggles to Insure the Integrity of Its Supply Chain Sumana Chatterjee1 Jaan Elias 2 Chocolate had always been considered an affordable little luxury, associated with romance and celebrations. Therefore in 2000 and 2001, revelations that the production of cocoa in the Cà ´te d’Ivoire involved child slave labor set chocolate companies, consumers, and governments reeling. In the United States, the House of Representatives passed legislation mandating that the FDA create standards to permit companies who could prove that their chocolate was produced without forced labor to label their chocolate â€Å"slave-labor free.† To forestall such labeling, the†¦show more content†¦The trees need to be shaded from the direct sunlight and therefore grow best in the â€Å"understory† of the forest, shielded by taller trees from the rays of the sun. This distinctive growing arrangement meant that cocoa cannot be grown on monocrop farms that allow mechanized cultivation and harvesting. Cocoa farming required a good deal of manual labor to get the beans f rom the tree to the factory. Newly planted cocoa trees require five to seven years of growth before they produce appreciable fruit, but once they mature the trees could produce beans for more than 50 years. Cocoa beans grow inside large footballshaped pods on the branches of the cocoa trees. These pods are manually cut from the branches with long handled knives. Once on the ground, the woody pod is split by machete and then workers scoop out the beans and pulp. Piles of bean and pulp are then covered with leaves or burlap and left out to ferment. It is during the fermentation process that the cocoa beans take on their distinctive flavor. After five to six days of on-site fermentation the beans are uncovered, separated from additional material and allowed to dry in the sun. Once dry, they can be collected and shipped to processing factories. Because of the increasing popularity of chocolate in Europe, Europeans introduced cocoa trees in the various tropical colonies under their contr ol. The French introduced cocoa trees to Cà ´te d’Ivoire in the 1920s. Cà ´te d’IvoireShow MoreRelatedCadbury an Ethical Company Struggles to Insure the Integrity of Its Supply Chain9818 Words   |  40 Pagesyale case 07-039 november 27, 2007 (revised august 24, 2008) Cadburyâˆâ€" An Ethical Company Struggles to Insure the Integrity of Its Supply Chain Sumana Chatterjee1 Jaan Elias 2 Chocolate had always been considered an affordable little luxury, associated with romance and celebrations. Therefore in 2000 and 2001, revelations that the production of cocoa in the Cà ´te d’Ivoire involved child slave labor set chocolate companies, consumers, and governments reeling. In the United States, the House of RepresentativesRead MoreMarketing Mistakes and Successes175322 Words   |  702 PagesStarbucks, we have moved Entrepreneurial Adventures up to the front of the book. We have continued Marketing Wars, which many of you recommended, and reinstated Comebacks of firms iii iv †¢ Preface rising from adversity. I have also brought back Ethical Mistakes, because I believe that organizations more than ever need to be responsive to society’s best interests. Altogether, this 11th edition brings seven new cases to replace seven that were deleted from the previous edition. Some of the cases