Oxfam's response to Kraft's position on "What's That in Your Coffee?"

GENERAL
Kraft: "Speaking on behalf of Kraft Foods, let me assure you that we too are concerned about the impact of current low coffee prices, which has been caused by an over supply of coffee beans in the world market."

Oxfam: If Kraft is concerned about the plight of poor coffee farmers the company could be doing considerably more to find solutions to the problem of low prices. The company must be part of global, concerted efforts to pay farmers a decent price.

QUALITY
Kraft: "A key to consumer satisfaction as well as stronger economic returns for farmers lies in product quality.  The quality of our coffee products begins with the quality of our coffee beans; therefore a major focus of our partnerships with producers is on promoting product quality."

Oxfam: We are concerned that the industry is buying low quality coffee (because it is cheaper and because it can mitigate the worst qualities through new technologies). Kraft has said it has found it difficult to obtain good quality coffee. Does Kraft have minimum quality standards that it adheres to in its coffee purchases? Are these independently monitored? And if not, would Kraft permit such independent monitoring?

GENERATING DEMAND
Kraft: "We believe that the most important contribution we can make to the long-term health of the coffee sector, including the sustained well being of farmers, is to continue to promote consumption and demand for coffee."

Oxfam: Kraft claims it is contributing to the development of the overall coffee market to sustain demand. But consumption of coffee in key rich consumer markets, such as the US, has been stagnant. There is both an over-supply of coffee by producers and an under-demand of coffee by consumers. Does Kraft acknowledge this challenge and why does it think it and the other roasters have not been able to do more to boost demand?

FAIR TRADE
Kraft: "The use of the Fairtrade Foundation's Fairtrade mark is only one way in which an extremely small number of coffee brands seek to secure a fair price for the coffee grower.   It is completely misleading, however, to assume or imply that manufacturers who choose not to market their brands in this way are somehow trading 'unfairly'."

Oxfam: Fair Trade is the only system that guarantees farmers a price that allows him/her a good return on coffee whilst at the same time working towards a sustainable future for the crop. Oxfam believes that paying a price to farmers that is well below the costs of production is unfair.

DIRECT DEALINGS WITHFARMERS
Kraft: "Directly dealing with each individual coffee farmer would lead to significant practical problems for a producer operating on our scale, particularly given the very different supply and purchasing arrangements that exist in the origin countries, which, in some cases, (eg. Kenya) actually prohibit such direct approaches. There are, for instance, more than 300,000 coffee farmers in Colombia, many of whom produce only five or so bags of coffee beans a year. Kraft Foods annual requirements on the other hand, amount to more than seven and a half million bags.   Dealing through Government marketing organisations, brokers and traders is therefore commonplace in the coffee trade and indeed these intermediaries often perform a vital role for the small producer.  We do, however, as far as possible try to ensure that these organisations retain standards of procurement, which meet our own high expectations."

Oxfam: No-one is suggesting that multinational roasters deal directly with individual farmers, but with cooperatives, some of which have hundreds or thousands of members. Nestle manages to buy 13% of its volumes directly from farmer organizations. What percentage does Kraft source in this way and would it be prepared to increase this percentage?

CORPORATE PHILANTHROPY
Kraft: "The difficult situation facing many coffee growers as a result of the current market imbalance is of great concern to everyone.  Kraft continues to focus its community giving programs to those that are most needy."

Oxfam: While Oxfam appreciates that the communities that are receiving assistance from Kraft much be benefiting from Kraft?s involvement, this piece-meal approach doesn?t go far enough in tackling the root causes of this horrible crisis. Kraft would help a great many more of the 25 million coffee farmers that its says it cares about by supporting the Coffee Rescue Plan. Will Kraft support this initiative and if not, why not?