4 ■ COFFEE WORLD
C&CI
March 2010
Colombian farmers say GERMANY
worst is far from over
In February, Colombia's National Federation
Coffee roasters fined for price fixing
of Coffee Growers (Fedecafe) boldly
announced that "the worst is over," and that At the end of 2009, Germany’s anti-trust regulator fined
this year's coffee harvest will be a significant
coffee roasters Tchibo, Melitta Kaffee and Alois Dallmayr
improvement on the harvest in 2009, which was
a record low. Confirming just how bad the 2009
Kaffee OHG and six managers at the firms a total of
harvest was, Luis Genaro Muñoz, the head of Fedecafe,
€159.5 million (US$229 million) for price fixing. The com-
said the harvest came in at 7.8 million bags in 2009, but declared that that in panies set up a cartel which the regulator said had fixed
2010 there would be an improvement, with production rising to 11-12 million
prices for coffee beans, espresso, and filtered coffee.
bags.
In subsequent statements, Fedecafe said it expects production to surge by as
The Bonn-based Federal Cartel Office said the cartel
much as 27 per cent in the first six months of the year, with output increasing by
had existed since the beginning of 2000 and continued to
between 4.91 million and 5.40 million bags, compared to 4.241 million bags in operate until the companies’ offices were raided in 2008.
the same period in 2009.
The three companies can appeal against the fines if they
However, Fedecafe’s figures are in sharp contrast with forecasts by
independent sources, some of whom have gone on record as saying that
wish.
Colombia will struggle even to match output levels from 2009.
More recently, German antitrust officials have also
Dry weather conditions are said to be already taking a toll on Colombian begun investigating some of the country's largest super-
coffee production in some areas, and to judge by the reaction to the cover story
markets and retailers over suspected cases of price-fixing
in the January 2010 issue of C&CI, many farmers remain weighed down with
debt, unable to afford to fertilize their plantations, and doubtful that assurances
of chocolate, both at the production and resale levels.
to them from the Colombian government – and from Fedecafe – about help for
Investigators say they believe as many as 24 companies
the sector will come to anything. have been involved in setting illegal minimum prices on
In the January issue of C&CI we reported that the Colombian authorities had
products.
announced a wide-ranging plan to extend subsidies to the coffee sector, absolve
smaller farmers of their debts, provide discounts for fertilizer, increase the
Investigators launched surprise searches of the offices
minimum price paid for Pergamino, and provide farmers with a ‘renovation
of some of the biggest names in the country's retail sector.
incentive’ to help them replace older, poorly yielding trees and tackle problems A total of 56 German Cartel Office employees and 62
that are widespread in the Colombian coffee sector.
police officers visited the offices of retail giant Metro,
Farmers who contacted C&CI after reading the article expressed dismay that
to-date they have seen no follow-up action whatsoever, and many do not expect
Germany's largest supermarket chains, including Edeka,
any help, whatever the government or Fedecafe say. According to farmers who
Rewe and Lidl, as well as the drug store chain Rossmann.
spoke to C&CI, far from receiving debt relief, small farmers are being told that The authorities also visited the offices of Mars.
they will lose their farms if they don’t find the wherewithal to pay off their debts.
Moreover, say farmers, many of the recent announcements – such as
subsidies for fertilizer – had already been announced before, towards the end of
THE NETHERLANDS
2008, and nothing has happened since. Other elements of programmes and
assistance announced by the government and by Fedecafe simply haven’t
materialised, they say.
Dutch coffee and tea associations to merge
Apart from inaction, and a lack of any follow-up after the announcements,
farmers say the paperwork involved in applying for subsidies is horrendous. Half
a dozen farmers in the Concordia region who provided information of
Members of the Royal Netherlands Coffee Trade Association, Association
C&CI all
say the same thing: "The pardon of debt has not been effective; I think they will of Dutch Tea Importers and Exporters, and Dutch Coffee Roasters and
help a few growers by the middle of July of 2010, but only if the local communi-
Tea Packers Association have decided unanimously to merge the three
ty makes a lot of pressure. We have borer beetle and rust - it is a big problem. I
try to control it but the money is not enough to buy all the pesticides and the
organisations. The newly formed organisation is to be known as the
fertilizers. We have not received fertilizer and we do not know if we are going to
Royal Netherlands Coffee and Tea Association (KNVKT, according to the
receive it. We have not received money in cash and we do not believe they will Dutch acronym).
give us money. We have all type of problems, but the biggest is the lack of
KNVKT Chairman Rob Koller said: "The merger… creates a visible and
commitment of our leaders," one farmer told C&CI, noting that in his view, the
problems in the area were to be found right across Colombia.
effective organisation for the entire Dutch coffee and tea sector. The com-
"They have not pardoned our debt and we do not believe they will. Not
bined interests of coffee roasters, tea packers and coffee and tea traders
anyone. The problems with borer beetle and rust are really bad and there is no provide the new association with more authority and impact. The associa-
money to control it. They have not given us fertilizers and they have not given us
tion has 55 members and represents a share of 98 per cent of the Dutch
money in cash and we do not believe they will," said another farmer. "All the
fertilizers are very expensive; then there is the weather and we have little help
market, which gives it broad-based support and a strong voice."
from the Coffee Federation," he told
The KNVKT will act as the voice of its members and a contact point for
C&CI.
"I do not know anybody who has been pardoned of their debt," said another. economic partners, civil society, government bodies, the political world
Describing the borer beetle and rust he said the main problem was that farmers
and the media. The association will play a key role as a platform and
lack the financial resources to tackle them. "We have not received any subsidies
or discount on fertilizer. We had not received any cash credits for renovation
knowledge centre to further the pre-competitive common interests of its
either, not in 2009 or this year. What we need are longterm credits, and
members. Its main areas of interest are supply chain management (sus-
subsidies for growers without that much bureaucracy and paperwork." All of tainability, food safety, energy efficiency), consumer information (labelling,
the farmers said that they believed coffee farmers everywhere in Colombia were
health claims, origin indications) and information (health, production,
struggling with the combined effects of the weather, high prices for fertilizer,
and with coffee borer beetle and rust.
brewing).
The Dutch consume an average of 147 litres coffee and 113 litres tea
per person per year. This means over three cups of coffee and 2.5 cups
of tea per person per day. In volume, The Netherlands is the fourth largest
tea market and the sixth largest coffee market in the European Union.
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