Zoos Victoria chief executive officer Dr Jenny Gray said it made the decision after the parent company of Cadbury and the Natural Confectionery Company, Mondelez, failed to declare where the palm oil used in its products comes from.
“They have not committed to certified sustainable palm oil and we cannot in good conscience keep selling those products,” she said.
“We are absolutely serious about mandatory labelling.”
Palm oil production has destroyed the habitats of rare and endangered animals including orangutans, tigers, gibbons and elephants.
Vision of an orangutan seemingly under assault from heavy machinery in Indonesia went viral on social media last June, briefly putting the issue of illegal palm oil operations back in the spotlight.
Last year, Zoos Victoria removed Nestle from its kiosks and food carts in Melbourne, Werribee and Healesville after the company was suspended from an organisation that promotes the sustainable use of palm oil.
Palm oil is used in a variety of products and can be disguised in labelling as “vegetable oil”.
Zoos Victoria said it had given all its food suppliers a six-month deadline to declare the origins of the palm oil they use and commit to getting all palm oil from sustainable sources.
The organisation’s Community Campaigns senior manager Ben Sanders said many large companies have committed to using only sustainable palm oil by 2023.
“Avoiding palm oil is not part of the solution,” he said.
“It is likely to cause bigger problems, because palm oil itself is not a bad product — it is about how it is farmed.
“We want people to know what is in their foods by mandatory labelling of palm oil and where that palm oil has come from.”
Mr Sanders added the European Union, Canada and the US have mandatory and clearer labelling and suggested the Australian Government should follow that lead.
Mondelez said it shares Zoos Victoria’s concerns and is committed to eradicating deforesting for palm oil.
It said 96 per cent of its palm oil is traceable to mills and added it is working with suppliers to ensure all of its palm oil is fully traceable.