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Modern Slavery and Human Trafficking Statement by Tchibo Coffee

Introduction

This statement sets out Tchibo Coffee International Limited’s our actions to understand all potential modern slavery risks related in our business and to put in place steps that are aimed at ensuring that there is no slavery or human trafficking in our business and our supply chains. This statement relates to actions and activities during the financial year 1 April 2019 to 31 March 2020.

As part of the coffee industry, we recognise that we have a responsibility to take a robust approach to slavery and human trafficking.

We are committed to preventing slavery and human trafficking in our corporate activities, and to ensuring that our supply chains are free from slavery and human trafficking.

 

1. Organisational Structure, our Business and our Supply Chains

1.1 We are primarily a coffee distributor, offering fresh, sustainably-sourced coffees to businesses such as catering, university, hotels and convivence sectors in the UK and Ireland. We employ around 170 employees where half of these are field based who provide regular, face-to-face contact with customers. The remainder are office based that support the everyday function of our business from telesales, marketing, finance, commercial, customer support, HR, production and warehouse. Our customers range from cafés, restaurants, pubs and contract caterers and include both national retail chains and single-outlet independents.

1.2 Our founders first started the business selling coffee to the home consumer back in 1949, over 70 years ago. The business remains owned by the same family. Tchibo Coffee International Limited came to the UK in 1991 where we have grown through different sectors and channels of business. We continue to operate as a standalone entity but with a new platform for further expansion and innovation with recent acquisitions of Matthew Algie (2016) and Capitol Foods (2018).

1.3 We source coffee to meet the requirements for our blends based upon quality, flavour, seasonality and sustainability. We have worked hard over the years to consolidate our supply chain and develop direct, long-term relationships with suppliers in coffee growing regions, though we buy green (unroasted) coffee through intermediary coffee traders who help facilitate the logistics and administration relating to our purchases. Our pioneering commitment to sustainability certifications complements our commitment to long-term relationships with suppliers. We launched in the UK a triple certified espresso (Fairtrade, Rainforest Alliance and Organic) in 2017 and more than 47% of the coffee we buy holds one or more of these certifications.

1.4 As well as coffee, we offer customers a convenient one stop shop, catering to all their needs. We mainly do this by working with selected third-party suppliers to offer customers a range of machines and “everything but the coffee” via our Espresso Warehouse brand. Our Espresso Warehouse catalogue range includes teas, hot chocolate powders, flavoured syrups, delicious treats and barista kits. Our commitment to sustainability certifications is maintained in these non-coffee products, with many of the relevant supply chains, most notably for our tea and hot chocolate products, holding Fairtrade, Rainforest Alliance or Organic certification.

1.5 The contents of this statement refer solely to steps taken by Tchibo Coffee International Limited, including the Espresso Warehouse business unit.

 

2. Countries of Operation

We currently operate in the following countries:

2.1 United Kingdom

2.2 Ireland

 

3. Assessment of Modern Slavery and Human Trafficking Risk in Our Business and Our Supply Chains

3.1 We are committed to ensuring that there is no modern slavery or human trafficking in our supply chains or in any part of our business. Our Anti-Slavery and Human Trafficking Policy (available upon request for external parties from our HR department) website reflects our commitment to acting ethically and with integrity in all our business relationships and to implementing and enforcing effective systems and controls to ensure slavery and human trafficking is not taking place anywhere in our supply chains. We have a zero-tolerance approach to all human rights violations across the business and our supply chains.

3.2 We have formally started assessing the risk of modern slavery in our business and supply chains. To plan our actions effectively, we also prioritised the areas that are of greatest importance to us as a business and are within our range of influence.

3.3 The outcomes of our assessment for 2018 are displayed in the below matrix. The results demonstrate few significant changes in 2018 and confirm that we should concentrate primarily on our coffee, tea and hot chocolate supply chains, alongside the sub-contractors that we choose to work with on-site.

3.4 The fall in the international market price for Arabica coffee to a twelve year low in September has further increased the risk of modern slavery in coffee supply chains. The price fall has been caused by a number of factors including particularly good output from the world’s largest coffee producing countries, leading to estimated over-supply of 10 million bags, and, record levels of speculative trading on coffee contracts putting further downward pressure on prices. As explained below, buying certified coffee helps to protect producers from these price slumps, but we are aware that many of the cooperatives we buy from will not be selling all of their coffee on Fairtrade and organic certified terms, meaning most of the organisations in our supply chains will still have been affected to some extent by the price decline.

4. Policies and Procedures

4.1 The below diagram explains our existing policies and procedures which are of relevance to the prevention of modern slavery in our own operations and our supply chain. The two key changes for 2018 were the introduction of a Human Rights Policy.

 4.2 Our Human Rights Policy is relevant to our internal operations and our supply chain and adds context to our longstanding commitment to the Ethical Trading Initiative Base Code. By signing up to the Code, employers agree that employment is freely chosen, child labour is not used, working hours are not excessive, fair wages are paid and no harsh treatment is allowed.

Appendix 2

5. Our Training and Assessment of its Effectiveness

5.1 Our mitigation activities with respect to our own operations remains consistent with our approach in previous years. We consider this approach to be broadly effective, however we are planning to roll out further training for line managers in 2020 to improve their awareness and identification skills.

5.2 In addition to this, we have provided modern slavery prevention training to employees directly involved in purchasing. We continue to develop this by providing this training to all of those that are involved with managing our supplier relationships and selection of new suppliers. The training improved attendees understanding of modern slavery and what they as individuals can do to help prevent modern slavery and identify potential cases.

5.3 As described in our previous statements, our regular visits to key coffee suppliers help us to fully understand the local context and consider the level of risk of modern slavery. In 2019 we travelled to visit suppliers in Peru.

 

5.4 Use of Certifications

5.4.1 Consistent with our approach in previous years, 7% of the coffee contracted in 2018 was Fairtrade certified and much of this volume held multiple certifications. Our commitment to these certifications stretches into the other products we source including tea, cocoa and sugar.

5.4.2 For the purposes of prevention of modern slavery, both the Fairtrade and Rainforest Alliance standards include criteria relating to social practices on the farm. For specific information on the core and development criteria relating to prevention of forced labour, please refer to Appendix 1.

5.4.3 It was announced in 2017 that UTZ would merge with Rainforest Alliance and their new joint standard will be published in 2019. Rainforest Alliance have publicly stated that they intend for the new standard to have a greater impact on farmer economics and social issues like child labour and forced labour.

 

6. Due diligence

6.1 We undertake due diligence when considering taking on new suppliers, and regularly review our existing supplier relationships. Our due diligence and reviews include:

● mapping the supply chain broadly to assess particular product or geographical risks of modern slavery and human trafficking;

● evaluating the modern slavery and human trafficking risks of each new supplier

● reviewing on a regular basis all aspects of the supply chain based on the supply chain mapping;

● taking steps to improve substandard suppliers’ practices

● participating in collaborative initiatives focused on human rights in general, and slavery and human trafficking in particular our company moto “Stronger together” initiative.

● invoking sanctions against suppliers that fail to improve their performance in line with an action plan or seriously violate our supplier code of conduct, including the termination of the business relationship.

 

Performance indicators

We have reviewed our key performance indicators (KPIs) and are continuously reviewing our existing supply chains. This is expected to be completed in 2020.

In addition, we expect our line managers to complete the relevant training by quarter one of 2020.

 

Board approval

This statement is made pursuant to section 54(1) of the Modern Slavery Act 2015 and constitutes our slavery and human trafficking statement for the financial year ending 31 March 2020. This statement was approved on 24th September 2019 by the organisation’s board of directors, who review and update it annually.

 

Director’s name: Paul Chadderton

Date: 10.10.2019