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Côte d'Ivoire: The Groupement des Négociants Ivoiriens (GNI) invites the Conseil Café-Cacao (CCC) to put an end to the monopoly of multinationals to promote local processing

28/01/2021
Source : News ABIDJAN
Categories: General Information Sectors

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According to a Reuters dispatch, the Groupement des Négociants Ivoiriens (GNI), which brings together about fifteen (15) small Ivorian exporters and shredders and has an estimated purchasing and export capacity of 300,000 tons of cocoa beans, a, in a letter addressed to the CCC on Friday, January 22, called on the Ivorian regulator of the cocoa sector to take urgent measures to reform the external marketing system so that exports of unprocessed beans are allocated to Ivorians and to put an end to the monopoly of six (6) multinationals established in C Ivory (Cargill, Barry-Callebaut, Olam, Touton, Sucden and Ecom) who buy 100% of the harvest each year. Of these six (6) multinationals, three (3) cargill, Olam and Barry-Callebaut alone buy 75% of the harvest and accumulate the license of processor and exporter of beans.

To this end, the GNI requests that the CCC require these six (6) multinationals to purchase beans and semi-finished products with local Ivorian companies, depending on the capacity of each local exporter and processor.

Ivorian exporters, grouped within the GNI, recommend to the CCC, as of this season, that 20 to 30% of the export contracts of local subsidiaries of multinationals be allocated automatically and obligatorily to Ivorian exporters and processors, in the form of international contracts (international courier).

In addition, to encourage local processing by multinationals and keep Ivorian bean exporters in operation, the GNI considers "that it is essential that exports of unprocessed beans in Côte d'Ivoire be allocated as a priority to Ivorian exporters and export structures belonging to the CCC".

Today, following the 2012 reform, these international contracts, which are only handled by Ivorian processors and exporters and which the CCC only manages to sell to the 6 multinationals in Côte d'Ivoire, can be bought or not, freely and optionally, by the latter. These international contracts are therefore generally neglected, or even ignored by the six (6) multinationals busy exporting themselves, via their Ivorian subsidiaries, beans for their factories in Europe, the USA and Asia. According to the GNI, "this situation does not allow Ivorian processors and exporters to have a viable business" and hinders the local processing of beans that are exported to 70% in Europe, regardless of the incentives for processing that Côte d'Ivoire offers to these multinationals.

Thus, the GNI states that "when an Ivorian or foreign company invests in processing, just like for the export of beans, the investor has no buyer of semi-finished products, apart from the 6 multinationals established in Côte d'Ivoire, who are its competitors". This is explained, according to the GNI, by the fact that the chocolatiers who are the end users have a tacit agreement with these six (6) multinationals who are their exclusive representatives and suppliers in Côte d'Ivoire, unlike Ghana.

Hence the need to impose on these six (6) multinationals, in exchange for their presence in Côte d'Ivoire, a minimum purchase of 20% of international contracts from the CCC so that Ivorian processors and exporters can sell their products.

For the GNI "it seems quite legitimate that, when a multinational buys volume through its subsidiary in Côte d'Ivoire, it obliges itself to buy 20 to 30% of its needs through national processors and exporters.


In addition, GNI members want the CCC to play the same role as cocobod in Ghana by selling beans directly to chocolatiers, without going through traders or shredders based in Côte d'Ivoire. According to them, this would avoid the problem of unsold contracts or abandoned stocks in the hands of cooperatives and planters that the country is currently experiencing.

"We should insist to the chocolatiers Mars, Mondelez, Nestlé, Ferrero, Meiji Co, Hershey, Lindt, Orion Corp, Blommer, Toms International, Valrhona, etc. who buy exclusively from the six (6) multinationals in Côte d'Ivoire, so that they also contract with the CCC a volume equivalent to the capacities of Ivorian processors and exporters, that the latter will charge on behalf of the CCC.", reads the letter addressed to the CCC by the GNI. These chocolatiers, as with the Cocobod in Ghana, have no counterparty risk with the CCC since it is the Ivorian State.

For the GNI, it is therefore the monopoly of these six (6) multinationals in the purchase and export of cocoa beans and semi-finished products that currently causes the accumulation of cocoa stocks in the fields and unsold contracts because they have reached their purchase volumes, the CCC has no other international buyers than these six (6) multinationals that buy 100% of the Ivorian cocoa harvest directly through their branches based in the country or directly from their headquarters.

For the GNI, ending the monopoly of multinationals by selling in part directly to chocolatiers as Ghana does through cocobod, without going through multinational traders and shredders, will allow Côte d'Ivoire to have control over its sales and stocks of cocoa.

"It seems important to us that the CCC set itself the objective of also selling international contracts for semi-finished products and beans directly to chocolatiers, not only for the benefit of Ivorian processors and exporters, but also to be able to diversify Côte d'Ivoire's customer portfolio, beyond the six (6) multinationals established on its territory. This will prevent the CCC from situations like this year's where the six multinationals, after covering the needs for their factories, refuse to buy additional cocoa without making significant margins," reads the GNI's letter to CCC.

The GNI also denounced the exclusivity of the management of the contracts of the beans certified by these six (6) multinationals which, thanks to this, have a significant financial bonus and can buy more expensive the beans certified from the cooperatives and buyers.

It calls for 50% of the international contracts awarded to Ivorian exporters to be certified be certified bean contracts. Certified beans now represent 50% of Ivorian cocoa production and are exclusively purchased by multinationals on behalf of chocolate makers who finance sustainability programs that these multinationals conduct in the field.

"Thus, the six (6) multinationals established in Côte d'Ivoire that today benefit unfairly from 100% of certified contracts from chocolatiers will lose, to the benefit of Ivorian exporters, a volume corresponding to only 10 to 15% of the volumes sold. This will allow Ivorian exporters, excluded from Ivorian producer certification programs, to survive and continue to export Ivorian cocoa. »

"We are therefore excluded from the chocolate market and certification programs for the sole benefit of our six (6) competitors – customers, representatives and exclusive suppliers of chocolatiers in Côte d'Ivoire."

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