Unilever, Mars, and Kellog's have all dropped IOI as their palm oil supplier after the firm was suspended from the RSPO involving NGOs due to non compliance of rules. ― Reuters pic

KUALA LUMPUR, April 8 ― Three major food companies have dropped their deals with Malaysian palm oil company IOI due to deforestation in the latter's plantations in Indonesia.

According to Singapore’s Straits Times today, Unilever, Mars, and Kellog's have all dropped IOI as their palm oil supplier after the firm was suspended from the Roundtable on Sustainable Palm Oil (RSPO) involving NGOs due to non compliance of rules.

The suspension came about after a year-long investigation into complaints lodged against IOI regarding deforestation in its plantations in West Kalimantan.

Unilever owns 400 brands, including Dove soap, Mars makes M&M's, while Kellog's is popular for its Kellog's Corn Flakes.

The decision by the three firms is expected to hurt IOI's finances as palm oil revenue contributed to 80 per cent of the firm's income in 2014, the report said.

IOI group CEO Lee Yeow Chor reportedly said that the RSPO suspension was a “serious matter” that presented new challenges, but did not comment on how the three global food and consumer companies' decisions will affect IOI's businesses.