With Easter looming, one of the single biggest trading period for chocolate, the pressure on cocoa supply chains is intensifying.

The UK is already the world’s third-largest chocolate confectionery market, consuming around 530,000 tonnes annually, while globally the sector is worth rdefooughly $130bn (£100bn+). Yet according to confectionery industry leaders, behind the seasonal surge in sales lies a more fragile system, one increasingly shaped by deforestation, climate pressure and regulatory uncertainty.

Now, as a new industry coalition launches in Parliament, Ferrero is warning that delays to UK legislation are holding back further investment in sustainable cocoa, despite years of progress.

Retail Gazette caught up with Ferrero following the launch of the UK Cocoa Coalition, which brings together major manufacturers, retailers and NGOs to push for long-delayed deforestation rules.

“Uncertainty is deterring investment”

At the heart of the issue is the UK’s Forest Risk Commodities regulation, first enabled under the Environment Act 2021 but still not enacted.

Ferrero is blunt about the consequences. “The lack of clarity resulting from the regulation not being enacted…undercuts the efforts of businesses, like Ferrero, that have already invested in traceability and sustainability measures.”

More critically, it confirms what many in the industry have been signalling privately: “This lack of clarity deters investment in supply chain improvements.”

That matters in a sector where transformation is capital-intensive, from mapping farms to verifying sourcing data, and where progress depends on long-term commitments.

Ferrero has spent years building what it describes as a “multi-layered responsible sourcing strategic approach”, spanning supplier risk management, traceability, certification and mitigation programmes.

Central to that is its long-standing philosophy of “sacco conosciuto”, aka “knowing what’s in the bag”.

“That’s why we invest in polygon mapping technology to map farm plots and give us precise location data to ensure no cocoa is sourced from protected areas,” the company says.

Through partnerships with Sourcemap and Starling, Ferrero says it can now apply “regulatory-level traceability standards” across its cocoa sourcing.

But even with those systems in place, the company is clear about the limits of going it alone.

“The existing economic, environmental and social issues underpinning cocoa supply chains are often complex, systemic and deeply rooted… no one entity can [address them] alone.”

Cocoa’s deforestation challenge

The urgency is not theoretical. Cocoa is now a leading driver of deforestation in West Africa, where around three-quarters of global supply is produced . In Côte d’Ivoire alone, 94 per cent of forest cover has been lost since 1990, with cocoa a major contributor.

In protected areas, the impact is even starker: cocoa has been linked to over a third (37.4 per cent) of deforestation since 2000 in parts of Ivory Coast.

Despite growing investment in traceability, the system remains only partially cleaned up. Industry data suggests just 56 per cent of cocoa volumes are confirmed deforestation-free, leaving millions of tonnes still linked to unknown or deforested sources.

For Ferrero, regulation is less about compliance and more about consistency. “We believe it is important to implement the UK Forest Risk Commodities regulation as this would ensure all companies are held to the same standards on a level-playing field.”

Without that baseline, companies investing heavily in traceability risk being undercut by those that are not.

The concern is also about capability gaps across the sector. “Meeting regulatory requirements… relies on capabilities like farm-level traceability and strong supplier engagement,” Ferrero notes, adding that smaller companies or those earlier in the transition may struggle without guidance.

Coalition pressure and a narrowing window for action

That argument is now being amplified through the UK Cocoa Coalition which includes Sainsbury’s, Marks & Spencer, Waitrose and Tony’s Chocolonely, alongside NGOs such as the Rainforest Alliance and Fairtrade Foundation.

Speaking at the launch, Alex Sobel said: “I welcome the fact that businesses are stepping up and calling for regulation to fight illegal deforestation.”

He added that the partnership “will add weight to the argument that this regulation, far from being a new burden on business, will actually bring clarity and support to businesses who have been waiting too long already.”

Duncan Brack, facilitator of the coalition, framed it as a pivotal moment: “The UK Cocoa Coalition brings together companies, certification initiatives and NGOs to argue for ambitious action… It is one of the most broadly based groupings active within these debates.”

He added the timing, just after the International Day of Forests and ahead of Easter -should act as “a wake-up call to government to use the influence of the huge UK market for cocoa and chocolate.”

Yet while regulation is widely supported, NGOs warn it must be designed carefully.

Owen Gibbons, senior manager at the Rainforest Alliance, said: “Regulations like these are essential to driving a deforestation-free cocoa sector, but must be designed with farmers’ livelihoods and realities in mind.”

He added: “Cocoa farmers are the least resilient actors in the supply chain, being on the front lines of the climate crisis and often suffering disproportionately from market volatility.”

The organisation is already working on solutions, including farm-level geodata and traceability systems, but warns: “We… look forward to working with the UK Cocoa Coalition… to ensure farmers are not left to carry the burden alone.”

For Ferrero, the conclusion is straightforward and increasingly urgent. “We are an active advocate of the Forest Risk Commodities regulation,” the company says. But without implementation, the risk is that momentum slows across the sector.

“Bringing organisations from across industry together… demonstrates how business needs and protecting the environment are not two competing factors but… go hand in hand.”

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