Pressure mounts over sustainable palm oil

06 November, 2009
Page 4 

Pressure is mounting on bakery companies to switch to sustainable palm oil, although it is unclear who is expected to pay for the changes.


World Wildlife Fund (WWF) last month published a league table, rating food companies and retailers on their record of buying sustainable palm oil, with firms such as Warburtons, Northern Foods and Allied owner ABF relatively low down the list.

Palm oil production is a main cause of deforestation around the world and a direct threat to species like the orang-utan.

The WWF table coincided with United Biscuits announcing it had entered into a long-term deal to source certified sustainable palm oil for its snack and biscuits, while Marks & Spencer revealed it will purchase GreenPalm certificates covering palm oil in almost 1,000 products.

Under the GreenPalm scheme, run by fats supplier AAK, companies purchase a certificate for every tonne of palm oil they use. This premium is then paid to farmers producing an equivalent amount of sustainable palm oil. Certificates cost $8, while a tonne of palm oil is around $650.

As pressure for change grows, there are concerns that suppliers could be left with the bill. Andy Pollard, president of the Association of Bakery Ingredients Manufacturers (ABIM), said: "Ingredients manufacturers are keen to the do the right thing and sustainable palm oil is a worthy cause, but it's not clear yet who should buy the certificates: the ingredients supplier, the baker or the retailer? Also, who will foot the cost? Ultimately, we hope that the extra cost can be passed on to the consumer rather than having to be absorbed within the already tight margins of those in the supply chain."

M&S is paying for the GreenPalm certificates and does not expect suppliers to contribute, while Asda and Tesco are now in discussion with suppliers over moving to sustainable palm oil.

Judith Murdoch, marketing controller at AAK, said: "Bakers might see this as just another cost and ask, 'Who will pay for it?'. But it's an issue that will be increasingly in the public eye. The big retailers have put their full weight behind it and it seems they are willing to take some of the extra cost into their businesses."





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