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Mugabe ally 'retaliates' against Nestle for cancelling Grace's milk
Zimbabwean authorities have hit back at Nestlé for cancelling its milk order from Grace Mugabe after an international outcry at the revelation that she was one of its regular suppliers.

By Sebastien Berger, Southern African Correspondent Published: 9:00AM BST 11 Oct 2009
The multinational food company bowed to pressure following The Sunday Telegraph's report that Nestlé Zimbabwe, the firm's Harare-based subsidiary, was buying up to a million litres of milk a year from Gushungo Dairy Estate - owned by the wife of Robert Mugabe, the country's 85-year-old president.
But last week it emerged that a senior government official warned the firm that its decision was seen as an extension of EU and American sanctions against members of Mr Mugabe's inner circle, which have infuriated his Zanu-PF party and which it blames for the country's descent into penury.

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Shortly afterwards the Reserve Bank of Zimbabwe - headed by Gideon Gono, a close Mugabe ally - froze the company's accounts at two banks, according to reports in Harare.
Although the accounts were later freed for Nestlé to use again, the move - reported by the Zimbabwe Independent, one of the few newspapers in the country to stand out against the government - is being seen as a warning shot across the company's bows.
Matumwa Mawere, a Zimbabwean businessman who now lives in exile in South Africa after his companies were taken over by Zanu-PF in 2004, said it threatened the credibility of the power-sharing government with the former opposition Movement for Democratic Change, which is trying to restore investor confidence and attract foreign investment.
"If the report on Nestle's bank accounts is true, then it's a sad day for Zimbabwe," he said.
When The Sunday Telegraph first reported that Nestlé was Mrs Mugabe's biggest customer, the Swiss-based company insisted it was doing nothing wrong - despite the fact that under sanctions regimes for companies with headquarters in the EU and the US, the purchase from Mr Mugabe's spouse would have been illegal. The Swiss government ruled that the Nestlé subsidiary was not subject to the country's own sanctions against the Mugabe regime, and Nestlé had assured the authorities that no-one in Switzerland was involved.
The Herald, a state-controlled newspaper in Harare, praised the firm for defying its critics, accusing Western media organisations of "a co-ordinated effort to harass Nestlé into pulling out of Zimbabwe."
But after one Facebook group gathered 8,000 members in just a few days, and a civil rights group in South Africa declared that "Nestle milk is blood milk", the company backtracked.
Within days, Nestle announced that it would no longer buy milk from Mrs Mugabe or any other non-contractual suppliers, and would instead buy only from the Dairy Board of Zimbabwe - which, it said, was only now in a position to supply all the milk it needed. But it admitted that the controversy was a factor in the decision, which was taken in consultation with its Swiss headquarters.
Gideon Gono, the governor of the Reserve Bank of Zimbabwe, told theZimbabwe Independent that the accounts were frozen temporarily while "two or so transaction which we thought were irregular" were investigated. These had now been explained and things were back to normal, he added.
Nonetheless there are fears that it was intended as a warning shot to the firm, which the sources said could be crippled if it could not access its bank accounts to pay its suppliers.
A spokesman for Nestle at its headquarters in Switzerland said: "No Nestle Zimbabwe bank accounts are currently frozen." He declined to comment on whether they had been previously frozen, or on discussions between company officials and the government.
No response was received from the Reserve Bank of Zimbabwe to a request for comment.

Robert Mugabe's Wife ANd Her Illicit Empire

How Grace's empire has fallen into ruin print friendly version
author/source:Cape Argus (SA)
published:Mon 28-Sep-2009
posted on this site:Tue 29-Sep-2009
Article Type : News
At least Robert Mugabe has ensured that the farms he took as part of his "land reform programme" are productive, if not profitable
Peta Thornycroft

Harare - While many of her countrymen remain hungry, Zimbabwe's First Lady Grace Mugabe has destroyed most of the choice white farms she has seized. Grace, the wife of President Robert Mugabe, has established a state-of-the-art dairy on one of the six or more farms she has acquired. And she is controversially selling milk to the Swiss-based company Nestlé. President Mugabe has also secretly grabbed five choice farms for himself, the Weekend Argus revealed yesterday. At least Robert Mugabe has ensured that the farms he took as part of his "land reform programme" are productive, if not profitable. But most of Grace's estates have fallen into ruin. Probably the previously most profitable of them, Zimbabwe's largest seed producing farm, Sigaro, in the rich Mazowe Valley near Harare, now produces no crops. Its infrastructure, packing sheds, a seed factory and a luxury home, burned down in 2007. The farm, among the top 10 most valuable in the country in 1999, lies fallow and it would take millions of rands to get it productive again. Next door to Sigaro, Gwebi Woods, a large export granadilla farm, owned by Washington Matsaire, CEO of Standard Chartered Bank, which Grace took early this year, was also burned down and lies fallow.

Even Foyle Farm, which she took in 2003, and where she has built her hi-tech dairy, is nowhere near as productive as it once was. It was Zimbabwe's top producer, yet today, despite the millions of rands of world class dairy equipment supplied and installed for Grace in June by Dairy Care, a South African company, it still produces only a sixth of the milk it did six years ago. Delaval, in Pinetown, KwaZulu-Natal which supplied Grace with the dairy equipment imported mainly from Germany, Sweden and Poland, said it was a top-of-the-range installation. Delaval spokesman Rykie Visser said he could not discuss the cost of Grace Mugabe's dairy equipment. "We keep that information confidential about all our customers," he said last Friday. Grace Mugabe's milk is bought by Nestlé Zimbabwe, part of the international group in Geneva, and while Switzerland is not a member of the EU it adopted its own measures against some Zanu PF leaders, including Grace Mugabe. The measures rule that Switzerland, like the EU, will not provide funds to anyone on its sanctions list. Other farms taken by Grace Mugabe, Leverdale and Gwina, in Banket, about 80km north of Harare were part of a farming operation run by the Nicolle family which produced 20 percent of Zimbabwe's wheat in winter. No wheat was planted this winter on these famed, rich red soils which have provided food for tens of thousands of Zimbabweans for decades.

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