Presence of Substitutes - Free Essay Sample

Introduction

The emergence of new snacks such as nuts, meat snacks, and bars is threatening the market of chocolate because people are beginning to prefer these new snacks. When the market of chocolate is affected, definitely the cocoa production is also going to be affected since the demand will be low and, therefore, also affect other factors such as the price. With the availability of these new snacks, chocolate is slowly beginning to lose its dominant position, and this is greatly affecting the industry. If this tread is going to continue, then it will eventually change chocolate consumption globally.

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Fluctuating Prices

Due to the increasing inflation, the prices for raw materials for chocolate manufacturing has risen, and this is affecting the industry because when the prices for raw material rises, then the cost of producing chocolate also rises and therefore affecting its consumption. (Afoakwa, 2010, p 35) A sudden increase in chocolate prices will lower the consumption rate because it will be difficult for retailers to convince the customers about the sudden rise in the price. The consumers would rather prefer to go for other substitute snacks. Cocoa production will, at the same time, be affected because the demand will be low.

Systemic Barriers in West Africa Chocolate Producing Industries

West African countries being the dominants when it comes to Cocoa production, are, however, struggling to manufacture chocolate. The main reason for this is that the cost of manufacturing chocolate in those areas is high; therefore, it makes West Africa Countries unfavorable for chocolate production since the factories will have to import some of the key ingredients such as milk, nuts, and sugar. Industries in those areas are also facing a shortage of power supply and, therefore, cannot operate at its full capacity. Also, chocolate requires to be transported under low-temperature conditions and thus making the cost of shipping to be high.

Abusive Child Labor

Unfortunately, this is the sad side of cocoa production. Children working in cocoa farms and chocolate manufacturing industries is still a big challenge. Children are abused, and it is preventing them from going to school. Child abuse in the form of labor is a global challenge, and in West African countries such as Ghana and Cote d’Ivoire alone, Approximately 2 million children have been discovered to be working in Cocoa fields, which is dangerous to them. Child abuse is, however, illegal in both counties, but despite that, child abuse is still practiced. What contributes largely to children working in cocoa fields is because of poverty. Low income for farmers means that they will not invest much in cultivation, and this will result in children being forced to work in unfavorable conditions in the field. Additionally, Most of the cocoa growing areas are under-developed; there is the unavailability of schools. Some of the families also are unable to but learning materials for their children and thus leaving them with no other option rather than sending them to work in cocoa fields.

Unfair Income for Farmers

The majority of the farmers in West Africa countries who are producing cocoa depend entirely on it as a source of income. In Cote d’Ivoire and Ghana alone, about 5 million farmers depend on cocoa as their primary source of income. However, the wages for these farmers is not fair and also unequal. In almost 3 million tons of cocoa produced annually, farmers receive only $1.25 on average per day. Due to the low revenue being generated, farmers are not able to plant new trees or even maintain the existing ones. It, therefore, becomes difficult for farmers, and they end up using a new land for cocoa instead of just replacing the old trees.

Conclusion

In the year 2011, The UNHC (United Nations Human Rights Council) adopted a principal in regards to human rights known as UNGPBH (Unites Nations Guiding Principles on Business and Human Rights). States were called upon to initiate guidelines and make laws that will curb human rights violations and even punish the offenders. Apart from States, Companies were also included such that in the supply chain, Companies are able to respect human rights in accordance with the principle of HRDD (Human Rights Due Diligence). Several civil societies have been recently calling for bodies such as the EU to initiate a legal framework to prevent human rights violations. Such regulations will affect the cocoa importers because it may lead to tough measures such as the duty of care to be imposed as States try to comply with UNHC guidelines.