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Nestle defends buying milk from Mugabe dairy

Published Sep 28, 2009


By Peta Thornycroft


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Zimbabwean President Robert Mugabe and his wife Grace have helped themselves to five or six of the most valuable of the hundreds of white farms his government has taken over.

Grace has taken at least six and established a state-of-the-art dairy that sells up to a million litres of milk a year to Nestle.

Mugabe, his wife Grace and a number of other Zanu-PF insiders are subject to sanctions by the European Union (EU), the US and other Western countries.

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But Nestle, the multinational food company, is not obliged to comply with the sanctions as its headquarters are in Switzerland, which is not a member of the EU.

Mugabe, The Sunday Independent reported yesterday, has built a secret personal farming empire from at least five white-owned farms where the owners were forced out.

Mrs Mugabe's properties total around 4 856 hectares, but her most important is Gushungo Dairy Estate, formerly known as Foyle Farm. It is in Mazowe, about 48km north of Harare.

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Other dairy farmers, who have also been forced off their land, say that the previous white owner of Foyle faced a campaign of violence over several months in 2003, until he was forced to sell his property to the state's Agricultural Rural Development Authority (Arda).

The price was set at about a quarter of independent estimates of the farm's true worth, they say, and the former owner received only 40 percent of that amount.

Mrs Mugabe became a regular visitor as soon as the previous owner departed, and workers at the property say it is now her farm, managed by Russell Goreraza, her son from her first marriage. She married Mugabe in 1996.

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She visits the farm several times a week, along a new road which is out of bounds for any vehicles but her fleet, according to workers at the dairy. Under her occupation, the farm has become one of the few in the country to benefit from investment in recent years and has been lauded in The Herald, the state-controlled newspaper.

The dairy produces 6 500 litres of milk a day, The Herald has said - only about 35 percent of its output under the previous owner, who produced 6.5 million litres a year, making it the biggest dairy farm in Zimbabwe.

Her biggest customer, according to her staff and other figures in the industry, is Nestle Zimbabwe, the local subsidiary of the Swiss company. The plant, in an industrial area in Msasa on the outskirts of the capital, manufactures powdered milk and cereals for the local market, and for export to East African countries.

Grace uses an unmarked tanker and trailer combination dedicated for her use to deliver milk three times a week to Nestle's plant on an industrial estate on the outskirts of Harare, according to workers at the food company.

The dairy's only other customers, according to farm staff, are personal callers at the premises, who buy milk for $1 (about R7) a litre.

A spokesman at Nestle's global headquarters in Switzerland said that at the end of last year "we found ourselves operating in a market where eight of our 16 contractual suppliers had gone out of business".

"As a result, in early 2009 the company started purchasing milk on the open market from various suppliers on a strictly non-contractual basis. In certain instances, the milk available in the market would be from Gushungo Dairy Estate."

Such milk would be bought on a "cash on delivery" basis, he said, adding: "Nestle has no direct engagement whatsoever with this estate."

But when asked to clarify whether it was bought directly or through a third party, he said: "We bought Gushungo Dairy Estate's milk through Dorkin Dairies until that firm collapsed last February, then we bought the milk directly."

Nestle is not covered by American or EU sanctions rules, but it has spent years protecting its reputation amid other scandals, particularly allegations over the improper promotion of formula milk to nursing mothers in the Third World, which it denies but which have led to consumer boycotts in the West.

American and European officials say that if Nestle were subject to their rules, it would be committing a criminal offence by trading with Mrs Mugabe.

Asked if despite its exemption from the sanctions measures because of its Swiss corporate nationality, it was doing anything wrong by doing business with Mrs Mugabe's operation, Nestle said: "During the recent crisis, Nestle has not considered moving its operations out of the country. By providing basic food products to Zimbabwean consumers, Nestle aims to meet the needs of the local population, many of whom are vulnerable and disadvantaged."

The company's code of conduct, according to its website, states: "We condemn any form of bribery and corruption." It also says that Nestlé "supports and respects the protection of international human rights", and adds that its suppliers should also adhere to its code.

Asked to explain its dealings with Mrs Mugabe in that context, it said: "Nestle does not provide any support, financial or otherwise, to the Gushungo Dairy Estate or to any political party in Zimbabwe."

Pay and conditions for workers at the dairy are meagre. A 25-year-old worker, with a baby to care for, said she cannot afford to buy its milk at $1 a litre.

"Do we ever get enough money? No, I get $40 a month, yet we sell lots and lots of milk," she said. "We do get cabbages returned from the market and 25kg of maize meal twice a month, but there is no electricity in our houses, only for office staff and managers.

"Mrs Mugabe is here a lot, but doesn't talk to us, just the managers."

At a ceremony commissioning new equipment at the Gushungo dairy in June, Mugabe referred to the dairy repeatedly as Mrs Mugabe's "project", saying she had invested "determination and dedication" to it".

It's now her project," he said. "I would like to congratulate her. Today you see this monument. It is a result of her efforts and time."

Mrs Mugabe herself told The Herald: "When we came here (farm), it was in bad state. I had to work hard to transform it to what it is today. I went into dairy farming because he (Mr Mugabe) wanted it. I did it especially for him." - Independent Foreign Service

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