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March 21, 2024

Annual Chocolate Scorecard reveals the dark side to your delightful Easter treat

Woolworths, Coles and Aldi among retailers in the spotlight for private-label chocolate products

Australia’s supermarket giants have been scrutinised for the transparency and sustainability of their private-label chocolate with German supermarket chain Aldi eclipsing its larger rivals to be the clear leader.

Woolworths and Coles, which together control 65 per cent of the country’s grocery market, and Aldi were evaluated in the 5^th Edition Chocolate Scorecard, an annual initiative spearheaded by an international team of non-profit organisations and academics, including from the ÃÃÍÅÊÓƵ’s School of Business.

Released just in time for Easter, , now in fifth year, evaluates global chocolate traders, manufacturers, brands, and retailers against seven markers: Traceability and Transparency, Living Income, Child Labour, Gender Equality, Deforestation and Climate, Agroforestry, and Agri-Chemical Management. Retailers are once again included in the Scorecard. They are assessed on their own branded or private label products. A traffic light system is used to rank retailers and manufacturers, in descending order, green, yellow, orange, red or grey for their overall progress towards these categories.

This year, 63 companies, manufacturers and retailers were assessed, including 38 of the world’s largest chocolate brands such as MondelÄ“z (maker of Cadbury), Nestlè, Hershey’s, Ferrero and Mars; nine smaller boutique chocolate brands, like Original Beans and Beyond Good; and 16 retailer stores, including Woolworths, Coles, and Aldi. Four companies and 18 retailers declined to take part or did not respond to the questionnaire, which resulted in them being awarded a grey rating. Three Good Egg awards were given to two small companies, Original Beans and Beyond Good, and to large company Ritter Sport. Tony’s Chocolonely was given an Achievement Award for leading the industry in policy and practice for five years in a row. Globally, no retailer scored a green rating.

The cocoa supply chain is incredibly complex and intricate, encompassing multiple countries and companies competing to meet increasing global demand. But it has a devastating environmental and human cost, plagued by issues such as deforestation, child labour, human trafficking, pesticide use, and gender inequality.

Associate Professor Perkiss said the dark side of chocolate production was in stark contrast to its marketing and reputation as a product of joy.

“Chocolate is associated with happy moments, a delicacy that conveys love and pleasure, particularly during times like Easter. But the delight that chocolate brings to consumers is marred by the dark reality of how that chocolate is produced. Child labour, sustainability issues, deforestation, pesticides all leave a bitter aftertaste to that sweet chocolate.”                                                                                          

Associate Professor Perkiss said all Australian retailers need to be applauded for their transparency through participation in The Chocolate Scorecard. These companies were early adopters and leaders in addressing human rights and environment issues through certification such as Fairtrade and Rainforest Alliance. Their current ranking is an indication that leading now means doing more than certification. All Australian retailers are ahead of the 18 companies who received a grey rating and were not prepared to reveal their policies and practices.                           

As retailers that sell their own branded chocolate products, Woolworths, Coles, Aldi, David Jones and Kmart/Target were subjected to the same scrutiny of The Chocolate Scorecard team as the other products that sit on the shelves in the same aisles. (Note, Myer does not sell any of its own branded chocolate).

Woolworths received an orange rating for its own-brand chocolate, which includes not only chocolate bars, but all chocolate products, including that found in bakery goods, cocoa powder, ice cream, and drinking chocolate. The orange symbolises that the company needs improvement in practice and policy. They rank 11^th globally. Woolworths are the only Australian company and one of the few retailers to trace all cocoa items in their supply chains, rather than just confectionery.

^{Associate Professor Stephanie Perkiss.} 

Coles, however, received a red rating, which means the retailer is trailing in practice and policy. They were one of three Australian-owned retailers to be given a red rating, alongside David Jones and Kmart Australia and New Zealand, which includes Target. These companies have been using a Certification model which needs expanding in order for Australian retailers to keep up with the standards being set in Europe and the UK.

Aldi Süd, the parent company of Aldi in Australia, which accounts for 10 per cent of the national grocery market, emerged as the leader in the Australian retailer field. Aldi was awarded a yellow rating, for progressing in policy and practice.

is often an impulse purchase. Stores stock confectionary products at payment areas, setting a high profit margin. These products can be the make or break financially for a retailer. Despite the importance, however, the team’s research shows that retail stores are less enthusiastic when it comes to the confectionery sustainability, particularly cocoa.

Associate Professor Perkiss, an accountant with a social and environmental justice lens, said retailers that place their private label on chocolate products have as much responsibility as big manufacturers to ensure transparency and accountability in their supply chain and sustainability practices.

“A number of retailers have told us that cocoa is not a significant part of their business. Yet, chocolate and confectionery are extremely prominent in supermarkets, including Australia’s major players Woolworths and Coles. You cannot visit these supermarkets without finding chocolate at the checkout or the end of the aisle, or without seeing a new special on confectionery items. If chocolate does not generate big profits, why do they place it in prominent sales locations?

“When a retailer has their own branded chocolate product, they have the same obligations as others in the supply chain to undertake the required due diligence to address human rights and environmental issues. In fact, you could argue that they have more responsibility, as a larger portion of the profits go back to the retailer.

“Retailers need to become responsible for sourcing and offering ethically produced chocolate. They generate huge profits from chocolate and chocolate products, and there is a growing demand among consumers for ethically produced and sustainable products.

“A company that lacks knowledge of its cocoa’s origin cannot genuinely ensure it is not tainted by extreme poverty, child labor, deforestation, or other abuses. Put simply if you can’t see it, you can’t fix it.”

Associate Professor Perkiss said The Chocolate Scorecard is driving change by highlighting those who are engaging in good practices and making a significant impact in addressing issues within their manufacturing processes and supply chains. It also shines a spotlight on practices that are not up to scratch and holds global manufacturers, companies, and retailers to account.

“Every chocolate purchase matters and sends a message to the chocolate producers that you value the steps they are taking to implement best practice into their farming, manufacturing and supply chain processes. 

“While being aware of where your chocolate comes from is really important to keep in mind this Easter, chocolate that is produced through caring for the environment and ‘slavery-free’ should be vital to consumers every day of the year.”

The team behind The Chocolate Scorecard includes Fuzz Kitto and Carolyn Kitto, Directors of Be Slavery Free, Ruben Bergsma, Be Slavery Free’s Director of The Chocolate Scorecard, Etelle Higonnet, Board Member of Climate Defiance, Professor John Dumay from Macquarie University, Associate Professor Stephanie Perkiss and PhD student Claire Harris from the ÃÃÍÅÊÓƵ, Sam Mawutor from Mighty Earth, and Dr Cristiana Bernardi from The Open University in the United Kingdom, along with a team of subject matter consultants and civil society groups – a total of 40 civil society organisations.