The international food company, Nestlé, has announced that it is to stop buying milk from a dairy farm owned by Zimbabwean first lady Grace Mugabe.

The decision follows threats to boycott Nestlé products, made after a British Sunday newspaper revealed the purchases, made from a farm seized from a white landowner under Zimbabwe's land reform programme.

In its initial response to the newspaper report, Nestlé defended its presence in Zimbabwe and said it was buying from Mugabe's farm, Gushungo Dairy Estate, after eight of the company’s 16 contracted suppliers went out of business.

"Nestlé prefers to work within contractual agreements to ensure a constant supply of fresh milk, but... in early 2009, [it] was forced to purchase milk on the open market from a wide variety of suppliers on a non-contractual basis. This includes milk from the Gushungo Dairy Estate."

Nestlé said Gushungo had supplied it with 10 to 15 percent of its local supply.

However, the company published a statement on its website on Friday saying it would stop taking milk from Gushungo and seven other farms on Sunday October 4.

"In light of the recent controversy surrounding our relationship with the Gushungo Dairy Estate, we believe that this announcement reflects our long-term commitment to Zimbabwe while acknowledging the specific circumstances around these events," the company added.

Nestlé said it had been buying from the eight farms "on a temporary basis" to help prevent a collapse of the dairy industry after the country's Dairy Board had been unable to pay the farms for their milk. However, the Daily Board was now able to resume buying from the farms, enabling Nestlé Zimbabwe to cancel its purchases.