New Report Exposes Starbucks, Nestlé for Abusive Labor Practices, Environmental Destruction in Mexico
Coffee giants deceive customers by touting ethical sourcing while trapping Mexican coffee workers in cycle of poverty, devastating environment to maximize profits
New findings follow December report exposing the corporations for abusive labor practices in China
MEXICO CITY – Empower released a report in collaboration with Coffee Watch and ProDESC revealing that Starbucks and Nestlé’s Mexican-certified coffee supply chain is plagued by human rights violations, negative environmental impacts, and exploitative practices that trap small producers in Mexico in a cycle of extreme poverty.
The report, Exploitation and Opacity: The Hidden Reality of the Mexican Coffee in Nestlé and Starbucks Supply Chains, exposes hypocrisy in both companies’ publicly touted corporate social responsibility programs and paints a picture of two major corporations using their influence to trap Mexican coffee farmers in a cycle of poverty to maximize profits.
“In the mountains of Chiapas and Veracruz, where Mexico’s coffee thrives, lies a harsh reality that Nestlé and Starbucks consumers never see in their expensive cups of coffee,” the report writes. “This research report uncovers how Nestlé and Starbucks, through questionable intermediaries and certification practices, have constructed a model that prioritizes corporate profits and control over the well-being of the small producers who sustain their supply chains, working closely with Mexican Government ministries and agencies.”
The report was jointly published Friday by Empower, a Mexico-based accountability and transparency organization and Coffee Watch, an international NGO watchdog on coffee industry accountability. It comes on the heels of a December 2024 Coffee Watch and China Labor Watch report that exposed Nestlé and Starbucks for allowing abusive labor practices in Chinese coffee.
The new report includes the following key findings:
● Coffee farmers in the supply chain are trapped in abusive labor practices, a cycle of debt and systemic marginalization - a disproportionate number are Indigenous people.
● Starbucks has used its economic clout to divide peasant organizations who traditionally negotiated for better collective conditions; eventually this has impacted farmers’ autonomy and forced them into unfavorable trading conditions.
● Peasants protesting against unfair practices in the coffee supply chain were violently repressed in Veracruz, Mexico with many protestors unjustly sentenced to jail time without a fair trial. Protests were put down by both local police forces and armed civilians hired by one of Starbucks’ importers.
● Private certification, such as Nestle’s 4C and Starbuck’s C.A.F.E., promotes a facade of sustainability and human rights protections while actually exploiting their producers and destroying the environment, as evidenced by documented tree cover loss for coffee in Mexico.
● Coffee trading companies often set purchase rates that fall significantly short of covering production costs, exacerbating the economic vulnerability of small-scale coffee producers.
Close Ties to Government Institutions in Mexico
The report argues that Nestlé and Starbucks are able to maintain this system through close ties with government institutions. It alleges revolving doors between industry, government, and the supposedly independent certification schemes used to market to conscious coffee consumers. Coffee companies leverage these dynamics to ensure they can continue to pay low prices, and influence the quality and variety of coffee grown.
As a result of conflicts, abuses, and questions around the supply of Mexican coffee from Starbucks and Nestlé, the report questions the effectiveness of their certification programs (Starbucks's C.A.F.E. Practices and 4C, which is used by Nestlé). While the certifications were ostensibly designed to ensure fair and sustainable practices in coffee production, according to the investigation, they have failed.
“This report reveals abuses that require urgent investigation by the new Mexican authorities and, in some cases, should serve as a warning for authorities in coffee-consuming countries such as France and Germany, where new corporate accountability laws are in place. If the authorities corroborate our findings, then Nestlé and Starbucks should be held accountable for their practices,” said Etelle Higonnet, executive director of the NGO Coffee Watch. “Moreover, we should shut down certification schemes that lock coffee farmers into extreme poverty and that turn a blind eye to serious human rights abuses.”
Report Exposes Coffee Giants’ Hypocrisy in Claims about Ethical Sourcing
The report shows Nestlé and Starbucks coffee supply chains cause environmental harm and perpetuate human rights abuses. Coffee growing is the 6th largest cause of deforestation globally, and the report demonstrates how environmentally-destructive coffee practices are advancing tree cover loss across Mexico. Yet, both Nestlé and Starbucks promote their global supply chain social responsibility and sustainability practices.
For example, Starbucks has publicly branded itself as a leader in ethical coffee and tea sourcing, including by developing its own set of “Coffee and Farmer Equity (C.A.F.E.) Practices” verification standards, which includes requirements for Starbucks coffee suppliers to prove environmental leadership and protections for people working on coffee farms – including wage standards and a “safe, fair and humane work environment.”
“Starbucks, for its part, has positioned itself as a global sales leader through its coffee shops, cultivating an image of commitment to sustainability, supply chain traceability, and support for producers,” the report writes. “However, the reality behind this facade tells a different story. Corporate control over production, pricing, certifications, and even social policies undermines the promises Starbucks makes to consumers.”
Nestlé uses the Common Code of the Coffee Community (4C) certification, which is supposed to guarantee coffee cultivation does not contribute to deforestation or human and labor rights are respected. Investigations show this standard may lack sufficient independence and favor the companies. Nestlé also promotes a strong sustainability practice on its website, including a commitment to protecting nature, ethical business practices, taking care of communities and an action plan for human rights.
Starbucks CEO Brian Niccol made 96 million USD in just four months at the end of 2024, while Nestlé CEO Laurent Freixe makes over 12 million USD per year, respectively. Yet the Mexican workers who farm Starbucks and Nestlé coffee are paid on average 106 USD per month – under the poverty line. A Mexican coffee farmer would need to work more than 7,000 years to earn what Niccol earns in just one month, and 700 years to earn what Freixe makes in a month.
Starbucks’ History of Deceiving Customers
The new report is yet another example of Starbucks making public pledges that is counter to their corporate activity in reality.
In 2023, multiple labor unions filed a complaint with the United Nations International Labor Organization (ILO) alleging that Starbucks has violated international labor standards and the rights of its employees by preventing them from joining a union and bargaining collectively – violating ILO principles, which Starbucks explicitly agreed to follow in its 2020 Global Human Rights Statement.
The National Consumers League (NCL) sued Starbucks in 2024 for falsely and deceptively claiming “100% ethical” coffee and tea sourcing while relying on farms and cooperatives that commit egregious labor and human rights violations including child labor, forced labor, sexual harassment and assault and other human rights abuses.
Find the complete report at empowerllc.net, prodesc.org.mx, and coffeewatch.org.
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Empower is a Mexico-based accountability and transparency organization. They were founded in 2013 to strengthen civil society and improve corporate accountability by eliminating the strategic information gap between civil society stakeholders of corporations and businesses themselves.
Coffee Watch is a nonprofit watchdog organization dedicated to the proposition that we should make the world a better place with each cup of coffee. It documents social and environmental abuses in the coffee sector, in order to demand better practices from the industry, and to raise consumer awareness.
ProDESC is The Economic, Social, and Cultural Rights Project (Proyecto de Derechos Económicos, Sociales y Culturales). It is a Mexican intersectional feminist human rights defense organization founded in 2005 to defend communities’ right to land and territory, labor rights, and other human rights.