Nestle Zimbabwe Conveniently Dumps Grace Mugabe Farm as Supplier

(MoneyWatch)  Nestle's Zimbabwe subsidiary will no longer be buying milk from Gushungo Dairy Estate -- a farm which was confiscated from white farmers as part of Zimbabwe President Robert Mugabe's widely condemned land reform program and given to the president's wife, Grace Mugabe. Nestle ended its dealings with Gushungo on Friday because of all of the negative attention and boycott threats Nestle received when the business relationship came to light earlier in the week.

Well, and because the relationship is no longer necessary. Apparently for a time the Dairy Board of Zimbabwe was broke and unable to purchase milk from Gushungo, and the local dairy market was more or less in shambles, so Nestle's Zimbabwe subsidiary took matters into its own hands. Several of Nestle Zimbabwe's other suppliers had gone out of business, and if Nestle hadn't bought from Gushungo milk, the company says, that milk would have just been wasted.

But now the Dairy Board of Zimbabwe is back on its feet and Nestle has found alternative sources of milk (which do not include the Dairy Board; Nestle told the BBC it sources exclusively from individual farms).

Nestle said its temporary relationship with Gushungo was necessary because the alternative would have hurt the local economy and caused losses in both the job market and the food supply. I really don't know enough about the economic situation in Zimbabwe to comment on whether or not dealing with Gushungo was the right thing to do under the circumstances, but from a public relations standpoint, it was potentially disastrous. I guess it's lucky for Nestle the market stabilized a bit before the Mugabe connection hit the news.