Global food leader Nestle�s Zimbabwean unit has stopped buying milk from a farm owned by President Robert Mugabe�s wife, Grace.
The farm was seized under Mugabe�s controversial land reforms.
Western countries vital for Zimbabwe�s recovery from an economic crisis demand political reforms, including an end to land seizures, before aid flows.
�In light of the recent controversy surrounding our relationship with the Gushungo Dairy Estate, we believe that this announcement reflects our long-term commitment to Zimbabwe while acknowledging the specific circumstances around these events,� Nestle said in a statement on its website.
Nestle�s decision to pull out of the deal came after international media coverage of the milk purchases put the company under the spotlight.
Nestle said its Zimbabwe unit had started buying the milk on a temporary basis in February 2009 because a local privatised marketing firm which dominates the milk industry was unable to make purchases during an economic crisis.
�This helped prevent a further deterioration in food supplies in Zimbabwe at that time,� said the company of its decision to purchase milk from eight farms, including one owned by Mugabe�s wife.
Mugabe�s seizure of white commercial farms for blacks have drawn heavy criticism from Western countries, who say they will not aid economic recovery until the land grabs stop and political and economic reforms are implemented.
Mugabe, who has formed a power-sharing government with rival Morgan Tsvangirai, has accused his Western foes of sabotaging Zimbabwe�s economy through sanctions in retaliation for his land reforms, which critics say ruined the agriculture sector. The President says the policy was meant to address historical land ownership imbalances.
In a September 28 statement, Nestle said its business with Gushungo accounted for between 10 and 15 per cent of the company�s local milk supply.
�Nestle has been in Zimbabwe for 50 years, working with the population of Zimbabwe and striving to maintain a long-term viable operation in often challenging conditions,� said the company.
�We operate in Zimbabwe, as we do in every country, through good times and bad. We work for the long term, in a way which has positive impact on our consumers, employees and suppliers.�
Biggest customer
Underscoring sensitivities about land reforms, Zimbabwe�s state-run Herald newspaper carried a story accusing the Western media of pressuring Nestle to pull out of what was once one of Africa�s most promising countries.
Foreign companies doing business with President Mugabe and his wife had been put under the spotlight following revelations that the Swiss food giant was buying one million litres of milk annually from Zimbabwe�s first family.
Reports in British newspapers said Nestle was the biggest customer for Gushungo Dairy Estates, now controlled by Mr Mugabe�s wife.
The veteran leader and his inner circle are prohibited from travelling to European Union countries or doing business with companies from the block under an embargo imposed in 2002 as punishment for alleged human rights violations.
Nestle, which is based in Switzerland has distanced itself from Nestle Zimbabwe but this has not calmed Zimbabwean and South African activists who have launched a global campaign for a boycott of the company�s products.
Several South African and European companies that supplied Mrs Mugabe with diary equipment for the farm she violently took over from a white farmer have also been targeted.
AfriForum, a South African civil rights initiative has launched an international campaign calling for a global boycott of Nestle products.
�The milk produced on the farm of Grace Mugabe is blood milk,� AfriForum says on its website. �Mugabe and his inner circle obtained this wealth by violently repressing thousands of people in .�
Source: Daily Nation
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