15 April 2022

Italian confectionary giant Ferrero said it will stop sourcing palm oil from Sime Darby Plantation after the US customs service found the Malaysian planter used forced labour.

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"On 6th April, we have requested all our direct suppliers to stop supplying Ferrero with palm oil and palm kernel oil sourced indirectly from Sime Darby, until further notice," Ferrero told Reuters by email.

"Ferrero will comply with the U.S. Customs and Border Protection’s decision."

Although Ferrero buys relatively little of the edible oil from Sime Darby, its move - following similar halts by Hershey Co and General Mills Inc - is a further reputational blow for Sime Darby and for Malaysia, which faces mounting allegations of labour abuses of migrant workers in various industries.

Sime Darby told Reuters it has taken steps in the area of human rights and that all its stakeholders who are committed to sustainability can be assured of its commitment and leadership in the industry. Ferrero is not a customer, it added.

"We are also in regular communication with all key stakeholders, particularly customers who have their own commitments," it said.

Ferrero said it does not buy directly from the Malaysian firm, which it said supplies 0.25 per cent of its palm oil volumes.

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