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Zimbabwe Government Offers Assurances to Nestle in Bid to End Supplier Dispute

Through government intervention it was proposed Nestle would purchase raw milk from a cooperative structure including the Mugabe-controlled Gushungo dairy, resulting in an arms-length relationship with the producer

The Zimbabwean government has offered multinational Nestlé assurances as to the safety of managers and staff aiming to end a dispute that led the company to suspend operations in the country after managers came under heavy pressure to buy milk from a dairy controlled by President Robert Mugabe's family.

Industry and Commerce Minister Welshman Ncube said Friday that he called a meeting of Nestlé executives, representatives of Gushungo Dairy Estate which is controlled by Grace Mugabe, the president's, and officials of Dairiboard Zimbabwe, a state-controlled milk processing and distribution enterprise.

It was proposed that milk produced by Gushungo would be purchased through a cooperative arrangement involving Dairiboard, and that Nestlé would purchase raw milk from the cooperative for an arms-length relationship with Gushungo.

Nestlé severed a supply relationship with Gushungo in October under pressure from international human rights activists who put a spotlight on the Mugabe family's control of the dairy operation seized in the name of land reform.

The multinational unit suspended operations after officials including ministers of Mr. Mugabe's ZANU-PF party reportedly attempted to compel Nestlé to accept a tank truck full of raw milk. Nestlé alleged harassment and intimidation.

Industry Minister Ncube told VOA Studio 7 reporter Gibbs Dube that the dairy would no longer interfere with the operations of one of the largest producers of milk products in Afridca. He said that Nestlé Zimbabwe has the right to independently control processes and food safety in its operations.

Nestlé management declined to comment. But sources close to the company said it was satisfied with the proposal and intended to resume operations. Other reports said a decision from Nestlé's Swiss headquarters was awaited.

The Confederation of Zimbabwe Industries, the Zimbabwe National Chamber of Commerce and the Zimbabwe Chamber of Mines welcomed the deal saying that the fragile economic recovery should not be “adversely affected by perceptions of inappropriate actions to deal with simple commercial issues."