Hershey Sued Over Child Labor Practices

Nov. 6, 2012

A public pension fund has filed suit against Hershey Co.to inspect the company's books and records, contending that the Pennsylvania-based confectioner uses cocoa produced as a result of unlawful child and forced labor in the West African countries of Ghana and the Ivory Coast.

The demand to inspect Hershey's corporate records was made by Louisiana Municipal Police Employees' Retirement System. The court filing marks the beginning of what could be a major shareholder challenge to the business practices of Hershey, the largest chocolate producer in North America. The company sells chocolate in some 70 countries worldwide with over $6.8 billion in net sales in the past fiscal year.

LAMPERS is represented by noted shareholder and corporate governance law firm Grant & Eisenhofer. The firm filed the complaint in Delaware's Chancery Court.

In seeking a court order compelling Hershey to make its corporate records open to shareholder inspection, LAMPERS maintains that the company's board has long known about the use of "tainted cocoa," yet has persisted in using ingredients from suppliers in West Africa, where illegal child labor practices are rampant, including the use of children under 10 to harvest cocoa in the field. Shareholders contend that the board has consistently permitted Hershey to engage in unlawful acts in violation of its certificate of incorporation under Delaware law, and consequently has breached its fiduciary duties.

"That one of the world's leading confectioners - whose primary market is children - could exploit child laborers to meet its bottom line is an outrage," said Grant & Eisenhofer co-managing director Jay Eisenhofer, who is counsel to LAMPERS, in a prepared statement. "Rather than open its records to scrutiny, Hershey over the past decade has thrown up multiple roadblocks to reasonable examination of its conduct regarding serious questions about illegal child slave labor and trafficking in its supply chain."


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