Nestle stops buying palm oil from Guatemala company accused of corruption

GUATEMALA CITY (Reuters) – Multinational food and beverage company Nestle said on Tuesday that it would stop buying palm oil from a Guatemalan company that has been accused by the country’s prosecutor of corruption.

In a news conference last week, Guatemala’s prosecutor accused Reforestadora de Palmas del Peten S.A. (Repsa) of paying bribes to receive tax credits. Repsa said in a statement last week that it would cooperate with the prosecutors’ investigators.

Swiss company Nestle said on Tuesday that it had decided to terminate its relationship with the company because of allegations.

“We have decided to stop our sourcing of palm oil from REPSA. We will honor existing contracts with the company, however these will not be renewed,” Nestle said in a statement, adding that the commercial relationship would be over by September.

Repsa, a pioneer in palm cultivation in Central America, confirmed in an email on Tuesday that Nestle would not renew its contract.

In 2015, Repsa was accused by non-profit groups of throwing contaminated waste into a Guatemalan river.

In December, global commodities trader Cargill [CARG.UL] also suspended purchases from Repsa.

Reporting by Sofia Menchu

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