Nestlé scraps deal with Mugabe

Johannesburg - Three days after defending its decision to buy its milk from Grace Mugabe's farm, Nestlé Zimbabwe has decided to discontinue doing business with the farm, it said on Thursday.

This after numerous organisations, including AfriForum, called on consumers to boycott Nestlé products if the company did not stop buying milk from Gushungo Dairy Estate, a formerly white-owned farm taken over by the Zimbabwean first lady.

"In light of the recent controversy surrounding our relationship with the Gushungo Dairy Estate, we believe that this announcement reflects our long-term commitment to Zimbabwe while acknowledging the specific circumstances around these events," the company said in a statement.

It said it would no longer buy milk from the farm, along with seven others it worked with since February 2009, on Sunday.

Reiterating a statement it sent on Monday, the company said it started buying milk from Gushungo Dairy Estate due to the food and economic crisis in Zimbabwe that caused a collapse in the country's dairy industry in the past few years.

By the end of last year, it found itself operating in a market where eight of 16 contractual suppliers had gone out of business, forcing it to buy milk on the open market, with Mugabe as one of its suppliers.

"In early 2009, Nestlé was forced to purchase milk on the open market from a wide variety of suppliers on a non-contractual basis," spokesperson Ravi Pillay said in a statement on Monday.

"This includes milk from the Gushungo Dairy Estate, which today accounts for between 10 and 15 percent of Nestlé's local milk supply," he said.

- Sapa