Page last updated at 09:07 GMT, Friday, 2 October 2009 10:07 UK

Nestle to stop Mugabe milk deal

Robert and Grace Mugabe (Dec 2008)
Gushungo is one of several farms controlled by the Mugabe family

Swiss multinational Nestle says it will stop buying milk from a farm owned by the wife of Zimbabwe's President Robert Mugabe.

Nestle said it had bought milk from farms including Grace Mugabe's Gushungo Dairy Estate to help the country as its dairy industry neared collapse.

The move comes after human rights activists had called for a boycott of Nestle products.

The farm was seized from its white owner under controversial land reforms.

Nestle said it had been buying milk directly from Gushongo after the local processer Dairy Board of Zimbabwe could no longer do so.

But Nestle said the DBZ was now able to resume its purchases from Gushungo estate and seven other farms, meaning the temporary arrangement was no longer necessary.

A Nestle spokesman clarified to the BBC that the company does not buy milk from the DBZ but from individual farms, which do not include Gushongo.

"In light of the recent controversy surrounding our relationship with the Gushungo Dairy Estate, we believe that this announcement reflects our long-term commitment to Zimbabwe while acknowledging the specific circumstances around these events," Nestle said in a statement.

West blamed

For many years Zimbabwe was a major food producer for neighbouring countries.

But the seizure of almost all white-owned commercial farms - with the stated aim of benefiting landless black Zimbabweans - has led to the collapse of the agriculture-based economy.

The country endured rampant inflation and critical food and fuel shortages.

President Mugabe, however, always blamed the collapse on Western sanctions including an aid freeze.

He said the land seizures were necessary because after years of colonial rule, much of the country's best land was owned by a small number of white farmers.

The economy has, however, stabilised in recent months since the former opposition joined a power-sharing government and the use of foreign currencies was legalised.

Mrs Mugabe is subject to international sanctions, along with her husband and dozens of other Zimbabwean officials.

But these cover travel to, and assets held in, the US, EU, Switzerland and other countries - they do not restrict trade, except arms sales.

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