2nd Case

Cadbury

I. INTRODUCTION

Cadbury chocolate is one of the world’s bestselling brands

with more than $3 billion in net revenues on 2016 but it didn’t

become one of the world’s favorite chocolate brands. However, in

2001, one news reporter discovered evidence of child slave labor

in making the chocolates in the Côte d’Ivoire or Ivory Coast,

located on the southern West Africa. Ivory Coast is by far the

world’s largest supplier of cocoa beans, providing 43 percent of

the world’s supply. The children in West Africa experience an

extreme poverty and most of the young people ageing 12 to 16 begin

to work to support their families. Some children are purchased by

the traffickers by telling that the job pays well from their

parents, who are ignorant that the jobs of their children are

dangerous, for a small amount, and some are through abduction. Due

to this child slavery labor, the Food and Drug Administration (FDA)

mandates to create standards to permit the companies who could

prove that their chocolate was produced without forced labor to

label their chocolate “slave-labor free.” But, the industry

officials believe that it is impossible to avoid child labor

because most of the cocoa farms in West Africa, which is insured

that all of these are complied with child labor, are located in

deep in the bush and since most of the families from the cocoa

sourced places are just dependent on their job in the cocoa farm

and on the production of chocolates, they would still work. The

revelation of the child slave labor in Ivory Coast hardly affects

the Cadbury. However, the company has done so much to improve their

supply chain such as they had pledged $400 million to improve the

lives of cocoa farmers and create a sustainable cocoa economy but

still it’s ineffective (Vandita, 2016).

II. STATEMENT OF THE PROBLEM

The Cadbury has already put an action to improve their supply

chain. But the actions of the company, which has struggled for

years to take forced labor out of its supply chain have been

ineffective.

Therefore, this case analysis aims to answer the following

questions:

1. What is/are the reason/s of the ineffectiveness of solving

the problem of the Cadbury?

2. What is/are actually the main problem/s to be solved?

III. ANALYSIS OF THE AREAS CONSIDERED

The Cadbury Company is facing struggles because they are

affected of the child slavery labor issue, so as the following

departments:

Legal Department.

The legal department of the Cadbury company is affected

because of the legal issue, which is child slave labor. It is

their responsibility to make actions that can prove to the

government and to the consumers that they are not involved in

such issue.
Production Department

This department is concerned in manufacturing the

products, where raw materials are converted into finished

products. It is also concerned to the shipment of the raw

materials. However, there’s a problem regarding with this,

since beans from numerous small farms were intermingled

before shipment, it was difficult to track those produced by

farms in compliance with labor standards and those that were

not.

Operations Department.

This department is responsible for controlling the

process of production, redesigning business operations in the

production of the goods. It is also responsible for the

acquisition of the raw materials. So, this department is

affected because it’s their responsibility to ensure that the

raw materials they acquire are slave labor free.

Marketing Department.

Its responsibility is to attract customers through

advertisements. However, the company is facing struggles in

terms of their customers since the company loose some

customers because of the ruined reputation of the company.

Sales Department

The department’s responsibility is to generate revenues.

However, due to the child slavery labor issue of the company,

its sales has decreased.

 Research and Development Department

Its concerned it to open new competitive advantage

through innovation. So, they are affected because the company

is struggling and is needing solution to the actual problem.

Finding solutions needs a thorough research to ensure that

they will be effective and beneficial to the company.

IV. CONCLUSION

The cocoa source of Cadbury before Ghana was from São

Tomé, a Portuguese colony on the western equatorial coast of

Africa, where extreme poverty is evident. However, in 1901, it

was revealed that São Tomé cocoa plantation owners employed

slave labor. With that, William Cadbury, himself traveled to

São Tomé to inspect the cocoa production situation. Then, he

finally ended the sourcing relationship that depended on the

child slave labor. Afterwards, the Cadbury cultivated new

cocoa sources in Ghana. Furthermore, he also persuaded other

chocolate companies to boycott cocoa from enslaved

plantations of Portuguese colonies of West Africa. With the

efforts of Cadbury, São Tomé ceased to be a major cocoa

producer, though the practice of forced labor persisted there

until the 1970s. (Flewelling, 2016)

As the chocolate industry has grown over the years, so

has the demand for the cheap cocoa. The chocolate companies

are competing for cheap price. In 2001, the issue of child

slave labor appeared again. Due to the competition, the

companies resort to child slavery so that they can minimize

the cost without affecting the quality of their and maximize

the profit. But that time, it was already from Ivory Coast,

the neighboring country of Ghana. This was the time that the

revelation of the confidential cocoa production of the

chocolate companies became controversial.

The controversial issue of the forced labor greatly

affects the Cadbury even though they are not already involved

since they already ended the source that depended on slave

labor. The owners of the Cadbury are strict abolitionist that

had historically opposed slave labor. It had been deeply

rooted religious traditions of the company’s founders, and

the organization had paid close attention to the welfare of

its workers and its sourcing practices. Hence, they had

pledged $400 million to improve the lives of cocoa farmers

for it not to be called as forced labor and create a

sustainable cocoa economy but it was still ineffective.

Many industry officials believe that slave labor free is

impossible to achieve since most of the cocoa farms are

located in the deep bush. The industry associations even

argued that with over millions of small cocoa farms in West

Africa, it would be nearly impossible to monitor the

compliance of any labor standard. The farms are not under the

control of the chocolate manufacturers and therefore the

companies cannot enforce working conditions. Also, the people

in the West Africa are in need of jobs since they are

experiencing extreme poverty and they see the cocoa farms as

their major source of income.

Cadbury is an ethical company. It means that they would

not do illegal matters that would ruin their reputation. In

 the case of São Tomé, they immediately ended the source

relationship when they had already affirmed that forced labor

was involved. Also, they even persuaded other companies to

stop the supply chain that depends on the child labor.

Furthermore, they also performed an action to improve the

lives of the cocoa farmers. They tried to take the forced

labor out. But with all of the efforts they exerted, they are

still ineffective. In that case, Cadbury engaging child slave

labor within the production is not already the actual problem

of the company because they already tried to get rid of that.

Thus, it’s the external environment that has the issue. It

includes the nonparticipation of other chocolate companies

and the cocoa suppliers to achieve “slave labor free”.

Therefore, the company is struggling to achieve the

integrity of the supply, since, many believe that it’s nearly

impossible to monitor the supply chain in compliance with the

labor standard and farms are not controlled by the company.

Consequently, the company’s reputation is affected.

V. RECOMMENDATION

The company has been struggling for the integrity of the

supply chain that ruined its reputation, in which the sales of the

company is affected. The following is the recommendations to solve

the struggles of the company:

FOR COMPANY:

Transparency.
Since, integrity of the supply chain is the actual

problem of the company, it results to have a direct impact on

its reputation and results of its performance. Hence,

transparency in the cocoa supply chain is one of the keys to

bring back the trust of the consumers and of the government.

Achieving visibility throughout the entire supply chain

results to some benefits: reduces risks, efficient

operations, responsible practices and etc.

Transparency can be achieved through the modern

technology. One way, documenting the process of the cocoa

production and making it as an advertisement that can help to

gain the trust of the consumers. Furthermore, the idea of the

Internet of Things (IOT) can help to track information about

the raw materials if they are intermingled with raw materials

that are made from slavery. (Nichols,2018) So, in this case,

the IT Department of the Company, which is the backbone of

smooth operations that involve technology, will be helpful

for this kind of way to achieve transparency.

Validation of no child slavery labor is involved.

The company should apply for validation to the

government to guarantee the customer that the company is not

involved in that kind of issue. This can help the company run

the operations smoothly, efficiently and effectively since

the requirements of the products are attained.

Purchasing System for Cocoa

The company should develop a purchasing system for

cocoa, in which it will be presented to the government for

verification purposes, to ensure that there will be a fair

return to the labor of the cocoa farmers.

Anti-Child Slavery Labor Seminar

The company should implement this policy within the

premise of the company. By implementing this, the company

should conduct a seminar for all the employees. The seminar

will be focused on giving awareness about the law. All of the

employees should be encouraged by creating a mechanism to

raise or report the issue when they witness a child labor in

the supply chain. Also, they will be all accountable to

monitor the policy. Furthermore, when the policy is attained,

the company should give incentives to all the employees and

this must be announced, so that they will be encouraged to be

serious on this matter.

FOR GOVERNMENT:

It’s the government responsibility to ensure that the

chocolate companies and cocoa suppliers will not be engaged

again to child slavery labor. To achieve it, the government

must:

 The government must hold a seminar for all the

chocolate industry officials and cocoa suppliers to

ensure that they are aware about the law.

 The government must do an oath taking for the

companies and cocoa suppliers that their products

are “slave labor free”.

REFERENCES

AXA at the Heart of a Business Case on Corporate Responsibility. (2015, May 20). Retrieved from
https://www.axa.com/en/newsroom/news/heart-business-case-corporate-
responsibility?fbclid=IwAR0fI6SiQH7shW39u6HrYDSLli1wTVdEV5ZuekUsCISHWVksjccvmgq1ZZo

CHILD LABOR AND SLAVERY IN THE CHOCOLATE INDUSTRY. (n.d.). Retrieved from Food Empowerment
Project: https://foodispower.org/human-labor-slavery/slavery-chocolate/

Flewelling, b. L. (2016, May 11). William Cadbury, Chocolate, and Slavery in Portuguese West Africa.
Retrieved from https://britishandirishhistory.wordpress.com/2016/05/11/william-cadbury-
chocolate-and-slavery-in-portuguese-west-africa/

Robbins, J. (2015, February 15). Is There Child Slavery in Your Chocolate? Retrieved from Food
Revolution Network: https://foodrevolution.org/blog/child-slavery-
chocolate/?fbclid=IwAR3B3DrRcvOz6h1oY7Y7N6Y5ZDkNQ0NJNC1rX0_bayT691qQpW6zVbhaWs
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Spoel, C. (2015, March 12). Cadbury Chocolate Child Labor . Retrieved from Prezi:
https://prezi.com/qtvwfkxdifzu/cadbury-chocolate-child-labor/