Hershey Co. (HSY:US) should be forced to release information about whether the chocolate maker’s cocoa is supplied by child labor on African plantations, an investor said in a lawsuit.
The Louisiana Municipal Police Employees’ Retirement System claims Hershey put its reputation at risk by relying on cocoa farms in Ghana and Ivory Coast. Hershey has acknowledged “rampant child labor” in both countries, according to the complaint filed today in Delaware Chancery Court in Wilmington.
“There are substantial grounds to believe, therefore, that Hershey’s chocolate empire is built on a foundation of West African child labor,” the pension fund said in the complaint.
Activists have long pushed companies to fight child labor in the cocoa industry. The most common tasks carried out by children on cocoa farms are filling plastic bags for nurseries, breaking up pods and transporting plants, according to the Fair Labor Association.
Under local law, carrying heavy loads is one of the worst forms of child labor, and the use of machetes and knives to break pods is a hazardous task, the FLA said, citing non- government organizations in Ivory Coast. About 89 percent of Ivory Coast children were involved in growing cocoa, according to a 2008 government survey.
Hershey “has been supporting cocoa-growing communities for more than 50 years. We have been involved in on-the-ground programs, working with public and private partners, to help eliminate inappropriate labor practices in cocoa communities,” Leigh Horner, a spokeswoman for Hershey, said in an e-mailed statement.
She also said Hershey “is engaged with the U.S. Department of Labor and the United Nations’ International Labor Organization in programs to address these labor issues.”
The 118-year-old maker of Hershey’s Kisses, Reese’s Peanut Butter Cups, Kit Kat and Almond Joy, is based in Hershey, Pennsylvania, and reported fiscal 2011 sales (HSY:US) of $6.08 billion.
Hershey rose 1.3 percent to $69.72 in New York Stock Exchange composite trading. The shares have climbed 22 percent in the past year.
The case is Louisiana Municipal Police Employees’ Retirement System v. Hershey Co., CA7996, Delaware Chancery Court (Wilmington).
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