September 27, 2011 7:02 pm

Mars in ethical switch for Maltesers

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Mars is batting aside concerns over rising input prices to add an additional $1.4m a year to the cost of making Maltesers by switching to ethically sourced cocoa.

From next year, UK Maltesers will all be Fairtrade certified, helping farmers receive a better price for their produce. The move follows Mars’s pledge two years ago that all cocoa used in the $10bn of chocolate products it sells each year will be sustainably sourced by 2020. At end-2010 the proportion stood at 5 per cent.

Switching Maltesers stands to boost Fairtrade sales, which hit £1.17bn last year in the UK, by 10 per cent. Privately held Mars is one of the world’s biggest buyers of cocoa beans, on which it spends more than $1bn a year. It said the move to ethically sourced produce appealed to consumers “who trust us to do the right thing” and provided security in the global supply chain.

“We do believe you can do good and do business,” said Fiona Dawson, president of Mars Chocolate UK. “It is not just around short-term sales but long-term investment in our cocoa supply chain.”

Mars said it would not raise the price of Maltesers, despite the $200 per tonne premium it will be paying farmers.

This is in line with the trend set by other chocolate brands that have moved to ethical sourcing.

Benchmark cocoa futures, traded in London, have fallen to $2,759 a tonne, close to a two-year low and down 27 per cent since March. Fairtrade guarantees a minimum price of $2,000 per tonne, with the $200 premium on top.

Establishing the sales impact of Fairtrade certification, which essentially promises a fair minimum price for farmers, is tricky. Overall Fairtrade sales rose 40 per cent year-on-year to 2010, but a huge part of that represents the introduction of new products.

However, growth in sales of Fairtrade bananas at certain supermarkets, which have a longer history, were essentially flat year-on-year.

Additional reporting by Jack Farchy in London

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