BANGKOK (Thomson Reuters Foundation) - Ever wonder where the sugar in a can of Coke or Pepsi or a mug of Ovaltine came from?
It may have come from land previously owned by indigenous and rural communities who are now landless and destitute after sugar companies forcibly evicted them, according to a new report from Oxfam.
Based on cases of land conflicts in Brazil and Cambodia, “Nothing sweet about it: How sugar fuels land grabs” faults some of the world’s biggest food and beverage companies - in particular Coca-Cola, PepsiCo and Associated British Foods (ABF) - for failing to ensure their sugar suppliers are not involved in land grabs.
“While our increasing appetite for sugar has health advocates ringing alarm bells… it has largely gone unnoticed that the sugar trade is also helping to fuel the problem of land grabs and disputes,” the report said.
It pointed to instances in which companies supplying sugar to these multinationals used political clout and threats to force local communities off their land, destroy their homes and pay inadequate compensation.
Coca-Cola and PepsiCo are two of the largest purchasers of sugar and ABF is the world’s second-largest sugar producer, Oxfam said. All use sugar in a wide range of processed foods, from soft drinks and yogurt to frozen meals and sauces.
“These companies continue to preside over supply chains within which the risks have increased of land grabs and land conflicts. Yet they are doing little if anything to prevent land grabs in their own supply chains,” the report said.
SUPPLY CHAINS UNDER SCRUTINY
The charity is asking the three companies to disclose their sources of sugar, palm oil, and soy commodities, to commit to zero tolerance for land grabbing and to publicly advocate that governments and traders invest in agriculture responsibly.
The report is the latest salvo in Oxfam’s Behind The Brands campaign, which aims to bring the 10 biggest food and drink brands - ABF, Coca-Cola, Danone, General Mills, Kellogg’s, Mars, Mondelez, Nestle, PepsiCo and Unilever - to account for what happens in their supply chains.
As a result of food companies relying on long chains of production, the biggest sugar buyers and producers “have failed to keep tabs on their industry’s insatiable demand for land, and the lengths to which the third party companies they work with will go to acquire it,” the report said.
In Cambodia’s Sre Ambel district in Koh Khong province, Thai company Khon Kaen Sugar (KSL) seized land from some 450 families in 2006. Demolition workers with bulldozers and excavators, accompanied by armed police, arrived without warning, activists say.
Six months after the company opened a sugar-processing factory in the district, Cambodia’s first shipment of sugar in four decades, 10,000 tonnes valued at roughly $3.31 million, was delivered to U.K. sugar giant Tate & Lyle, according to activists.
Oxfam says Coca-Cola and PepsiCo bottlers buy sugar from Tate & Lyle, who has said it has no plans to buy more from KSL. Activist say Tate & Lyle has already received 48,000 tons of sugar from Cambodia, estimated at €24 million.
While soy and palm oil are also linked to land grabs, sugar is the most land-intensive, according to Oxfam.
Sugar is grown on 31million hectares of land globally - an area the size of Italy - and much of it is in the developing world, the report said.
The global sugar trade is worth around $47 billion, and the food and drinks industry accounts for more than half of the 176 million tonnes of sugar produced last year, it said.
Sugar production is predicted to increase by 25 percent by 2020, it added.
Unlike in the U.S. where most soft drinks are now made with high fructose corn syrup and sugar substitutes, in the EU and elsewhere they are generally made with real sugar, Oxfam said.