The bitter truth behind the Nutella economy

The hazelnut industry in Turkey has a longstanding problem with poor working conditions and child labor, and things have taken a turn for the worse.


April 30, 2019

Thanks to the popularity of products like Nutella, hazelnuts are in high demand. 

But in Turkey, where 70% of the world’s hazelnuts are grown, the industry’s horrendous human rights record is regressing, The New York Times reports

Big business, small farmers

Turkey’s 600k hazelnut farms are so small (just 4 acres on average) that they hire minimum-wage earning migrant workers — including thousands of Syrian refugees without work permits or legal protections. 

Since Turkey’s Labor Code doesn’t apply to farms with fewer than 50 employees, most hazelnut farms are not subject to any government regulation or scrutiny. 

With no one to monitor working conditions at farms other than large candy companies like Ferrero or Nestlé, working conditions are worsening.

Hazelnut hazards

For harvesters, hazelnut farms are not sweet: 99% work 7 days a week, often toiling from 7 am to 7 pm on dangerous cliff sides.

Many families — particularly Syrian refugee families — don’t earn enough money to afford shelter unless all of their kids work, which has caused child labor to increase.

Making matters worse, unregulated hazelnut hustlers called “dayibasi” charge impoverished laborers more than 10% of their wages and then force them into quasi-indentured servitude with exploitative payday loans.

Ferrero protects its nuts before it protects its workers

Turkey’s hazelnut crop brings in $1.8B each year, but little of that cash ends up with all the laborers working their nuts off. Instead, it ends up with dayibasis — and big candy companies.

Ferrero Rocher — the Italian confectioner that makes Nutella — buys ⅓ of Turkey’s hazelnuts (if you’re keeping score, that means Ferrero buys more than 23% of the entire world’s hazelnut crop).

But although company chairman, Giovanni Ferrero, has a personal fortune worth $22.3B, Ferrero refuses to disclose its suppliers, instead relying on child labor and exploited refugees to produce its profits.

Daily briefings, straight to your inbox

Business and tech news in 5 minutes or less

Join over 1 million people who read The Hustle

Psst

How'd Bezos build a billion dollar empire?

In 1994, Jeff Bezos discovered a shocking stat: Internet usage grew 2,300% per year.

Data shows where markets are headed.

And that’s why we built Trends — to show you up-and-coming market opportunities about to explode. Interested?

Join us, it's free.

Look, you came to this site because you saw something cool. But here’s the deal. This site is actually a daily email that covers the important news in business, tech, and culture.

So, if you like what you’re reading, give the email a try.