The Mondelēz lawsuit: A warning shot in the battle for authentic sustainability claims

Filed under the Illinois Consumer Fraud and Deceptive Business Practices Act and the Illinois Uniform Deceptive Trade Practices Act on August 16, the legal action challenges the integrity of the Oreo maker’s cocoa-sourcing program, with a focus on ‘labor standards’ and ‘environmental practices’ within its supply chain.

The lawsuit contends the snack giant is misleading consumers by creating the impression that its products are more sustainable and ethically sourced than they actually are.

It argues ‘reasonable consumers seeking to buy sustainable, responsibly sourced cocoa products are misled by the Cocoa Life logo on the Products because those Products are neither responsibly sourced nor environmentally sustainable. In fact, the Products are the result of child labor and destructive environmental practices, making them harmful to people and planet.’

Implications for the company

The allegations center on the company’s use of the Cocoa Life logo on products like Oreos, Toblerone, Cadbury and Cote D’Or. The packaging includes the words ‘100% sustainably sourced cocoa’, which purportedly assures consumers the cocoa is sourced via practices that respect human rights and the environment.

However, the lawsuit alleges these claims are far from the truth, pointing to child labor and deforestation associated with cocoa farming in West Africa.

The case cites a 2020 NORC Report from the US Labor Department that about 1.56 million children as young as 10 years old are being used for ‘arduous manual labor’ to meet the demand on cocoa farms in Côte d’Ivoire and Ghana, including 1.48 million children who have been ‘exposed to at least one component of hazardous child labor in cocoa production.’

It adds, ‘Mondelez tells consumers that the Products ‘protect the planet’ and ‘respect the human rights of people within our own operations and in our value chain’ but offers no publicly available standards to support, back up, or underlie that marketing. Consequently, Mondelēz’s marketing – which leads consumers to believe that the cocoa in its Products is responsibly sourced and ‘sustainable’ – is false and misleading.

‘By deceiving consumers about the nature and quality of its Products, Mondelēz is able to sell a greater volume of the Products, to charge higher prices for the Products, and to take market share away from competing products, thereby increasing its own sales and profits.’

However, according to a Washington Post article – also cited in the lawsuit – Mondelēz is one of the companies to source much of its cocoa from these two countries and therefore cannot ‘guarantee that any of their products were free of child labor’.

In an era where consumers increasingly prioritize ethical and sustainable products, being exposed as misleading on such critical issues could lead to a significant loss of consumer trust and consequently, market share. It also opens the door to potential regulatory scrutiny, which could result in stricter oversight and compliance requirements. Mondelēz may need to overhaul its supply chain management, which could involve more rigorous auditing processes, greater investment in supporting farmers and closer collaboration with independent third-party certifiers.

The broader impact on the food industry

The implications of this lawsuit extend beyond Mondelēz. It highlights the growing importance of transparency in supply chains and the need for companies to substantiate their sustainability claims with verifiable data. As consumers become more conscious of the social and environmental impacts of their purchases, producers that fail to meet these expectations risk not only legal challenges but loss of loyalty.

Moreover, this case could set a precedent for how sustainability claims are regulated and litigated.

If the court rules against Mondelēz, it could lead to stricter standards for what constitutes ‘sustainably sourced’ or ‘ethically produced’ products. This could compel companies across the industry to reevaluate their marketing strategies; adopting a more conservative approach and avoiding broad claims that could be interpreted as deceptive.

In an increasingly competitive market where consumers are willing to pay a premium for ethical products, the ability to genuinely deliver on promises could be a key differentiator.

Erosion of trust

For consumers, the lawsuit underscores the challenges of making informed choices in a marketplace where sustainability claims are increasingly common​​ yet not always trustworthy.

The Cocoa Life logo may now be seen as a symbol of corporate greenwashing​​ rather than genuine corporate responsibility. This erosion of trust could make consumers more skeptical of sustainability claims in general, leading them to demand greater transparency and accountability from the brands they support.

The lawsuit also raises awareness of the harsh realities behind the products that consumers often take for granted. The accusations of child labor and environmental degradation in cocoa farming, particularly in West Africa, are not new, but again brought to the forefront.

A wake-up call for CSR initiatives

The class action highlights the growing scrutiny of sustainability claims in the corporate world.

For businesses, this case is a cautionary tale about the importance of ensuring that marketing messages align with actual practices. As the demand for sustainable products continues to rise, so too will the expectations for accountability and transparency. Companies must navigate this landscape carefully, ensuring their CSR initiatives are both genuine and verifiable to maintain consumer trust and avoid legal pitfalls.

Mondelez International has not responded to our request for comment.

Case: 

Tim Gollogly v. Mondelez International Inc., Case No. 1:24-cv-07368, in the US District Court for the Northern District of Illinois, Eastern Division.