Vevey, Switzerland (GenevaLunch) – The Nestlé subsidiary in Zimbabwe buys milk produced on Gushunga Dairy Estate farms seized from their owners between 2002 and 2004, the UK’s Sunday Telegraph reports 26 September.

The dairy farms are part of an estimated 4,800 hectares of prime agricultural land reportedly owned by Robert and Grace Mugabe. Both are on what the EU has labeled “targeted sanctions” lists, with visa and some trade restrictions set for more than 20o individuals and some 40 countries. These were first imposed in 2002 in the wake of the seizures of lands owned by white farmers, part of Mugabe’s land reform. They were extended following the disputed presidential elections in June 2008.

Switzerland also adopted targeted sanctions, in line with those of the European Union [ed. note: UK media have incorrectly reported that Switzerland does not have sanctions because it is not part of the EU], but the Gushunga Dairy is not on the identical EU and Swiss government list of blacklisted businesses. A spokesperson at the finance ministry in Bern told GenevaLunch Monday that the ministry contacted Nestlé when it became aware of the milk sales and it has been assured that the sales are entirely the business of its Zimbabwe subsidiary. “Nestlé confirmed that no individuals or companies in Switzerland were in any way involved in the relevant transactions. Therefore, no further investigations are planned at the moment.” The Bern office noted that the “Swiss legislation on international sanctions, including the sanctions against Zimbabwe, deploys its effects only in the territory of Switzerland. Foreign subsidiaries of Swiss companies are not subject to the Swiss legislation. The dealings of Nestlé Zimbabwe (Private) Ltd are therefore not in violation of the Swiss sanctions regulation against Zimbabwe.”

Swiss and EU sanctions involve only transfers of money or transactions with companies outside Zimbabwe: Even if Gushunga Dairy were on the list, the sanctions would not apply.

The former owner of Gushunga Dairy Estate, in Mazowe, 50 km north of Harare, was forced to sell at a below-market price in 2003, one of many white-owned farms that were invaded by “war veterans” allied with Mugabe’s ruling party, Zanu-PF, then taken over by the government Agricultural Rural Development Authority (ARDA). The farms’ former owners left the country, many of them going to Australia and New Zealand.

Nestlé has been in Zimbabwe since 1959 and produces condensed milk and cereals for domestic sales and export, according to the company website. A spokesperson at Nestlé’s Vevey headquarters told GenevaLunch that due to the economic situation in Zimbabwe, half of Nestlé’s regular suppliers of milk went bankrupt by the end of 2008. Nestlé makes up the shortfall by buying milk on the open market on a cash basis. Between 10 and 15 percent of the milk it buys on the open market comes from the Gushunga Dairy Estate, he told GenevaLunch. The farm workers interviewed by the Telegraph reporters say that Mugabe’s wife sends a tanker truck three times a week to pick up 6,500 litres of milk for delivery to the Nestlé plant outside Harare, Zimbabe’s capital.

Nestlé employs 200 people in its plant in Zimbabwe. Its continued presence in the country, the company spokesperson says, meets “the needs of the local population, many of whom are vulnerable and disadvantaged.” At independence in 1980, Zimbabwe was a major exporter of food, which represented 40 percent of its foreign earnings. Today less than 20 percent of the land seized from white landowners is actually in use.

The European Union is Zimbabwe’s most important donor of foreign aid, with much of the money going for food aid.

Links to other sites: AllAfrica, BBC, Daily Telegraph, Reuters

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