This post has been updated. See below for details.
Hershey Co. is being sued by an investor group accusing the giant confectionery brand of overlooking the African child labor allegedly used to produce the cocoa in its candy.
The Louisiana Municipal Police Employees’ Retirement System, a public pension fund and Hershey shareholder, filed suit this week against the company in Delaware Chancery Court.
The suit, filed the day after Halloween’s trick-or-treat gluttony, seeks to force Hershey to open its corporate records for investors, divulging which cocoa suppliers it uses.
Hershey sells chocolate in 70 countries and earned more than $6.8 billion in revenue in its last fiscal year, according to the complaint.
The pension fund claims that Hershey’s board knew that its ingredients came from West African suppliers sourcing from farms built on illegal child and forced labor. Reports on abysmal labor conditions in the region were circulating as far back as 2001, according to the complaint.
Hershey’s tacit support of the work practices “is beginning to harm its business relationships, which could ultimately cost the company millions in profits,” the investor group contends. It also alleges that Hershey “has flouted domestic and foreign law” related to human trafficking.
In August, a group of 65 retailers wrote to Hershey’s board voicing concerns on the issue, according to the complaint.
But Hershey denied requests for transparency, saying that it doesn’t purchase cocoa beans directly from West African farms and instead buys processed ingredients from multinational companies, according to the complaint.
Hershey representatives could not immediately be reached for comment. Last month, the company said that by 2020, it would use only suppliers with sanctioned labor practices. Around the same time, Whole Foods Markets abandoned the company’s artisan Scharffen Berger brand, citing sourcing concerns, according to advocacy group Green America.
"That one of the world's leading confectioners -- whose primary market is children -- could exploit child laborers to meet its bottom line is an outrage," said Jay Eisenhofer, who serves as counsel to the pension fund, in a statement.
[Updated, 1:45 p.m.: Hershey representatives declined to comment on the details of the pending litigation, but issued a statement saying that the company "takes its commitment to responsible sourcing very seriously and 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," according to the statement. "As part of these efforts, Hershey is engaged with the U.S. Department of Labor and the United Nations’ International Labor Organization in programs to address these labor issues."]
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