Zoos Victoria has dumped Nestle products from its kiosks and food carts after the company was suspended from an international organisation that promotes the sustainable use of palm oil.

The organisation, which operates the Melbourne and Werribee zoos, has long campaigned for the sustainable production of palm oil — an ingredient blamed for threatening the critically-endangered Sumatran orangutan population.

Palm oil is the most commonly used "vegetable oil" in the world. ( ABC Rural )

Nestle's certification with the Roundtable on Sustainable Palm Oil (RSPO) was suspended last week when it failed to submit a report outlining the company's actions on producing and buying certified sustainable product.

The Swiss food company has until July 20 to submit the report or its RSPO membership will be terminated.

Zoos Victoria said it would not sell Nestle products unless the company complied with RSPO standards.

"This is the best and most reliable way we … can guarantee that the food we're selling is not contributing to the loss of wildlife," said Rachel Lowry, the director of wildlife conservation and science at Zoos Victoria.

"We know that the production of palm oil overseas is marching species to the extinction line, like both orangutan species, Sumatran tigers, pygmy hippos."

Products including Allens lollies, Lifesavers, Smarties and Kit Kat, Aero and Milky Way bars are being removed from kiosk shelves.

'Nothing has changed': Nestle

Nestle said it was disappointed at the decision and reiterated its support for the aims of the RSPO.

"Absolutely nothing has changed for our products: we are continuing to use exactly the same palm oil ingredients from the same RSPO-certified supply chains," Nestle spokeswoman Margaret Stuart said.

"We're disappointed that our RSPO membership has been suspended.

"We're talking to the RSPO and hope to re-qualify in the coming days.

"While our approaches differ, we believe that the sector will be stronger if we work together."

The rainforest habitat of Sumatran orangutans is being cleared to make way for expanding palm oil plantations in South-East Asia, and those orangutans not killed when trees are felled are forced to move and compete with other animals for dwindling food sources.

Sorry, this video has expired This 2014 footage of an orangutan fleeing an excavator in Indonesia recently went viral.

It is often difficult to tell which products contain palm oil, because Australian guidelines allow generic terms like "vegetable oil" or "vegetable fat" to be listed on packaging instead.

The RSPO was set up by the World Wide Fund for Nature, with industry partners and environmental organisations, in 2004. In 2011, the RSPO trademark was launched to certify products containing sustainably grown palm oil.

But research published in Environmental Research Letters last month cast doubt on whether RSPO certification was achieving real improvements in the sustainability of palm oil production.

Environmental, social and economic performance between certified and non-certified plantations in Indonesian Borneo were compared by University of Queensland (UQ) researchers.

"We found no significant evidence to suggest RSPO was better in achieving any of those metrics compared to non-certified plantations," lead author Courtney Morgans said.