Throwing the Chocolate Bar Out with the Bathwater

This commentary by the International Institute for Sustainable Development (IISD) criticizes Cadbury's decision to replace Fairtrade International certification with an in-house sustainability standard for its cocoa sourcing. The author argues that this shift reduces public oversight, increases transaction costs for producers, and undermines the participatory governance and market credibility provided by independent international standards.

• Cadbury, which accounts for 15 per cent of global cocoa purchases, announced on December 1 (year not specified, but following a 2009 commitment) that its parent company, Mondelez, would replace Fairtrade International certification with an in-house sustainability standard.
• The transition to an in-house standard is viewed as a regression that dilutes the market for sustainable cocoa by reducing public oversight and increasing the number of standards producers must comply with, thereby raising transaction costs.
• Unlike third-party certifications that provide independent verification and allow producers to access broader market benefits (such as finance and diverse market access), in-house standards limit producer benefits to those offered by the single owner of the standard and risk making producers 'hostage' to one buyer.
• The move may trigger a 'race to the bottom' in the industry, where other companies feel pressured to abandon rigorous independent standards in favor of less stringent in-house standards or corporate social responsibility (CSR) programs.
• Cadbury's shift rejects the participatory governance model of sustainable development. While Fairtrade International utilizes a board of producer groups, consumer groups, and companies, an in-house standard remains an internally managed system regardless of external consultation.
• The author asserts that independent multi-stakeholder standards like Fairtrade function as a 'public good' by providing transparent governance and credible market information, which are sacrificed when a company adopts a private in-house process.

APA

Potts, J. (2017). Throwing the Chocolate Bar Out with the Bathwater. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/cadbury-sustainability-standard-cocoa-industry-commentary.pdf

Chicago

Potts, Jason. Throwing the Chocolate Bar Out with the Bathwater. International Institute for Sustainable Development, 2017. https://www.iisd.org/system/files/publications/cadbury-sustainability-standard-cocoa-industry-commentary.pdf.

Wikipedia

{{cite report |last1=Potts |first1=Jason |title=Throwing the Chocolate Bar Out with the Bathwater |publisher=International Institute for Sustainable Development |date=January 2017 |url=https://www.iisd.org/system/files/publications/cadbury-sustainability-standard-cocoa-industry-commentary.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{potts2017throwing, author = {Potts, Jason}, title = {{Throwing the Chocolate Bar Out with the Bathwater}}, institution = {International Institute for Sustainable Development}, year = {2017}, month = jan, url = {https://www.iisd.org/system/files/publications/cadbury-sustainability-standard-cocoa-industry-commentary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }