Nestl under pressure to renew ties with Mugabes

gushungo_dairy_farmHARARE -- International food giant Nestl has come under growing pressure from groups loyal to Zanu (PF) to renew commercial ties with President Robert Mugabe and his wife Grace. (Pictured: Gushungo Holdings Grace Mugabe was allocated dairy farm under her husbands chaotic and often violent land reform programme)

The milk processor about two weeks ago cut links with the Grace Mugabe-owned Gushungo Dairy Estate, a farm the Presidents wife seized at the height of her husbands controversial and chaotic land reform programme.

Nestl stopped buying milk from the farm, after an international media outcry and threats by consumer groups to campaign for a boycott of the companys products because of its dealings with the Mugabes.

Days after Nestl stopped buying milk from Gushungo, the companys bank accounts in Zimbabwe were frozen in what the Reserve Bank of Zimbabwe claimed was a routine exercise to sniff out financial irregularities. But analysts say the measure was meant to punish Nestl for refusing to take Graces milk.

The freeze on bank accounts has since been lifted but the pressure on Nestl to reverse its decision has kept building.

Last week a group of youths tried to force the Zimbabwe branch of Nestl to buy more than 20 000 litres milk from Gushongo Estate. It is understood the group, led by Youth Minister Saviour Kasukuweres brother Tongai, tried to force Nestl staff to offload the milk tanker that had been transported from Gushungo farm.

But after a four-hour standoff, including intense debate and negotiations with Nestl Zimbabwe management, the tanker and the Zanu (PF) youth group eventually left the company premises with their milk.

A local black empowerment group then lashed out at Nestl last Wednesday, saying the international group should be forced to sell its Harare branch to local blacks if it refuses to renew its relationship with Grace.

The Affirmative Action Group (AAG), whose members are reported to be closely linked to Zanu (PF), last Wednesday said Nestls refusal to buy milk from Gushungo farm was part of a foreign regime change agenda. The group added that the international firm should not be allowed to continue embarrassing the Presidents family.

Independent economist John Robertson explained to SW Radio Africa last Friday that the pressure on Nestl by Mugabe loyalists was to be expected, adding the threats wont affect Nestls decision.

The pressure has come without any official power or authority to follow through on the threats, Robertson said. They dont have the power to sway a big corporation like Nestl.

Robertson at the same time dismissed the comments by the AAG, saying the people or individuals needed are just not there to take over this company. He agreed the milk-saga has been incredibly embarrassing for Nestl, but said it will now work to protect its international reputation first.

Nestl would rather remove themselves from Zimbabwe altogether than cave to this pressure, Robertson said.

The move to sever ties with Grace came after Nestl faced intense pressure from human rights groups and concerned individuals, amid revelations that the Swiss company was buying up to a million litres of milk a year from the Gushungo Dairy Estate.

This was despite the fact that the dairy farm was owned by the wife of the President who is blamed for ruining Zimbabwes once successful farming sector through his chaotic and often violent land reforms.

Although Switzerland has restrictions against members of the Mugabe government, the Swiss government had defended Nestl Zimbabwes relationship with Grace, arguing the regulations they have in place only apply to firms in Switzerland and not subsidiaries elsewhere in the world.

But critics immediately lashed out at the food group over its disregard for basic corporate responsibility, saying multinational support of the Mugabes would ensure their continued corrupt practices. — SW Radio Africa.

Post published in: Economy

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