26 Sep 2009
By Peta Thornycroft in Harare and Sebastien Berger, Southern Africa Correspondent
Mr Mugabe, the president of Zimbabwe, his wife and a number of other figures linked to his administration are the subject of European Union and US sanctions as a result of their controversial 29-year rule over the once-prosperous country.
Nestlé, the multinational food company which is the biggest customer of Mrs Mugabe's dairy farm, is not obliged to comply with those sanctions as its headquarters are in Switzerland, but the country has its own set of measures, including against Mrs Mugabe, among which it "is forbidden to make funds available to persons mentioned, or put them, directly or indirectly, at their disposition". Nestlé denies that it has violated Swiss law.
Mr Mugabe, The Daily Telegraph disclosed, has built a secret personal farming empire comprising at least five white-owned farms from which the owners were forced out during his regime's evictions of about 4,000 commercial farmers.
Mrs Mugabe's properties total about 12,000 acres, but her most important is Gushungo Dairy Estate, formerly known as Foyle Farm. It is in Mazowe, about 30 miles north of the capital Harare.
Other dairy farmers, who have also been forced off their land, said that the previous white owner of Foyle faced a campaign of violence over several months in 2003 until he was forced to sell his property to the state's Agricultural Rural Development Authority (Arda). The price was set at about a quarter of independent estimates, they say, and the former owner received only 40 per cent of that amount.
Mrs Mugabe became a regular visitor as soon as the previous owner departed. Workers at the 2,400-acre property say it is now her farm, managed by Russell Goreraza, her son from her first marriage. She married Mr Mugabe in 1996, after his first wife died.
She visits the farm several times a week, according to workers at the dairy. Under her occupation, the farm has become one of the few in the country to benefit from investment in recent years and has been lauded in The Herald, the state-controlled newspaper.
Mrs Mugabe has built a new residence on the farm, remodelled the original farmhouse and constructed an office block, workers said. The dairy produces 6,500 litres of milk a day, The Herald has said, which is only about 35 per cent of its output under the previous owner, who produced 6.5 million litres a year, more than any other dairy in Zimbabwe.
Her biggest customer, according to her staff and other industry insiders, is Nestlé Zimbabwe, the local subsidiary of the Swiss company. The plant, in an industrial area in Msasa on the outskirts of the capital, manufactures powdered milk and cereals for the local market and for export to East African countries.
Mrs Mugabe uses an unmarked £100,000 tanker and trailer combination dedicated for her use to deliver milk three times a week to Nestlé's plant on an industrial estate on the outskirts of Harare, according to workers at the plant.
The dairy's only other customers, according to farm staff, are personal callers at the premises, and when The Sunday Telegraph visited, the milk cost $1 (62p) per litre. The Sunday Telegraph was unable to locate any documentation for the tanker – registration number AAF 2381 – at Zimbabwe's central vehicle registry.
It has a capacity of 30,000 litres, but sources in the dairy industry and Nestlé itself say that it carries only 6,500 litres per delivery, which would amount to about one million litres a year in sales.
A spokesman at Nestlé's global headquarters in Switzerland was unable to confirm a precise figure, but said that the estimate was "reasonable".
He said: "At the end of last year we found ourselves operating in a market where eight of our 16 contractual suppliers had gone out of business.
"As a result, in early 2009 the company started purchasing milk on the open market from various suppliers on a strictly non-contractual basis. In certain instances the milk available in the market would be from Gushungo Dairy Estate." Such milk would be bought on a "cash on delivery" basis, he said, adding: "Nestlé has no direct engagement whatsoever with this estate." But when asked to clarify whether it was bought directly or through a third party, he said: "We bought Gushungo Dairy Estate's milk through Dorkin Dairies until that firm collapsed last February, then we bought the milk directly."
Nestlé has spent years protecting its reputation amid other scandals, particularly allegations over the improper promotion of formula milk to nursing mothers in the Third World, which it denies, but which have led to consumer boycotts in the West.
American and European officials said that if Nestlé was subject to their rules it would be committing a criminal offence by trading with Mrs Mugabe.
Mrs Mugabe is one of a number of people individually targeted by international sanctions.
In July 2002, she was first included on an EU list, and she has been on Washington's list since it was created in 2003. On the Swiss list she is described as "spouse of the head of government and as such engaged in activities that seriously undermine democracy, respect for human rights and the rule of law".
A spokesman for Nestlé said it had “absolutely not” broken Swiss law.
“The legislation is internal to Switzerland,” he said. “In any case, Nestlé Zimbabwe and any commercial transactions it engages in within Zimbabwe are subject to Zimbabwean law.”
Asked if it thought that it was doing anything wrong by doing business with Mrs Mugabe's operation, Nestlé said: "During the recent crisis Nestlé has not considered moving its operations out of the country. By providing basic food products to Zimbabwean consumers, Nestlé aims to meet the needs of the local population, many of whom are vulnerable and disadvantaged."
The company's code of conduct, according to its website, states: "We condemn any form of bribery and corruption." It also says that Nestlé "supports and respects the protection of international human rights", and adds that its suppliers should also adhere to its code.
Asked to explain its dealings with Mrs Mugabe in that context, it said: "Nestlé does not provide any support, financial or otherwise, to the Gushungo Dairy Estate or to any political party in Zimbabwe.
"Nestlé is a truly global company which operates in almost all countries in the world, and therefore its products are found in widely diverse political settings."
No response has been received to The Sunday Telegraph's requests for comment from Mrs Mugabe at State House or through her husband's spokesman, nor from the agriculture ministry.
Pay and conditions for workers at the dairy are meagre. A 25-year-old worker, with a child to care for, said she could not afford to buy the milk at $1 (62p) a litre.
"Do we ever get enough money? No, I get $40 (£25) a month, yet we sell lots and lots of milk," she said.
"We do get cabbages returned from the market and 25kg of maize meal twice a month, but there is no electricity in our houses, only for office staff and managers. Mrs Mugabe is here a lot, but doesn't talk to us, just the managers."
Many Zimbabweans blame Mrs Mugabe for her husband's descent into misrule and fixation on financial gain. Mr Mugabe's first wife, Sally, a Ghanaian, died of renal failure in 1992 and four years later, aged 72, he married his former typist Grace, 40 years his junior.
The couple had begun their relationship and had two children even before Sally's death, with a third child born in 1997.
With a penchant for lurid dresses, often from expensive European designers, and matching head gear, Mrs Mugabe is famous for her extravagant shopping trips abroad – during one of which, in February, she was approached by a press photographer outside a hotel in Hong Kong, and responded by smashing her jewel-encrusted fist into his face. Gushungo Dairy Estate is not the only farm controlled by Mrs Mugabe.
In 2002, she personally ordered John and Eva Matthews, both in their seventies, out of their 29-room house on the nearby 2,500-acre Iron Mask Estate, giving them 48 hours to leave.
Farmers in the area said that she had also taken over Sigaro farm from Joe Kennedy, a major seed producer who has now left Zimbabwe and did not want to comment.
Sources said that last year she took over the neighbouring property, Gwebi Wood, which had been bought by Washington Matsaire, the chief executive of Standard Chartered Bank's Zimbabwe subsidiary, in 2001.
He did not want to comment, but neighbours said the farm was now "a mess".
Mrs Mugabe also has properties in Banket, about 50 miles north of Harare.
In December last year, Ben Hlatshwayo, a high court judge who had evicted Vernon Nicolle from the 1,445-acre Gwina farm in the area, was in turn forced out by alleged "unlawful conduct" on Mrs Mugabe's part, according to court papers he reportedly filed.
His legal action was later abandoned, however, and when asked about the events he would not comment.
According to Mr Nicolle, who has emigrated to Australia, Mrs Mugabe has also taken over the nearby 1,740-acre Leverdale farm, which used to be owned by his brother Piers until he was forced out by Arda in 2002.
Last month Mr Nicolle visited both properties.
"Anything that could be vandalised and sold has been destroyed," he said.
He added that some of his former workers found him during his visit. "It was very emotional," he said. "They thought I was returning to take the farm back and were disappointed when I said I was just visiting."
Mrs Mugabe's farm management is, nonetheless, celebrated in The Herald newspaper.
At a ceremony at the Gushungo Dairy in June, Mr Mugabe referred to the dairy repeatedly as Mrs Mugabe's "project", saying she had invested "determination and dedication" to it. "It's now her project," he said. "I would like to congratulate her. Today you see this monument. It is a result of her efforts and time."
Mrs Mugabe herself told The Herald: "Today has been a wonderful day for me. When we came here it was in a bad state. I had to work hard to transform it to what it is today. I went into dairy farming because he [Mr Mugabe] wanted it. I did it especially for him."