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EXCLUSIVE-Ferrero to stop buying palm oil from Malaysia's Sime Darby over labour concerns

Credit: REUTERS/Stefano Rellandini

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

KUALA LUMPUR, April 15 (Reuters) - Italian confectionary giant Ferrero said it will stop sourcing palm oil from Sime Darby Plantation SIPL.KL after the U.S. customs service found the Malaysian planter used forced labour.

"Ferrero will comply with the U.S. Customs and Border Protection's decision," Ferrero, which uses palm oil its in Ferrero Rocher chocolates and Nutella spread, told Reuters by email.

It said it has asked its global suppliers to stop supplying palm oil and palm kernel oil from Sime Darby.

Although Ferrero buys relatively little of the edible oil from Sime Darby, its move - following similar halts by Hershey Co HSY.N and General Mills Inc GIS.N - 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.

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

Following a 2020 decision that indicated "forced labour indicators" at Sime Darby, the U.S. Customs and Border Protection said in January it had sufficient evidence that the firm's goods are subject to seizure.

U.S. says sufficient evidence of forced labour at Malaysia's Sime Darby Plantation

U.S. blocks palm oil imports from Malaysia's Sime Darby over forced labour allegationshttps://reut.rs/3xqDw2r

(Reporting by Mei Mei Chu; Editing by William Mallard)

((meifong.chu@thomsonreuters.com; +603-2333-8005; Reuters Messaging: @meixchu on Twitter))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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