The Swiss food giant buys up to a million litres a year from Gushungo Dairy Estate, controlled by Mrs Mugabe since, according to other dairymen, the previous white owner was forced by a campaign of violence to sell his property to the authorities for a knock-down price.
Under the European Union and American targeted sanctions against members of Mr Mugabe's network, it is illegal to transfer money or make transactions respectively with Mrs Mugabe.
Switzerland has its own set of sanctions, similar to the EU measures, which also target Mrs Mugabe and which prohibit providing funds to her or putting them 'directly or indirectly', at her disposition. Nestlé denies that it has broken Swiss law.
A Nestlé spokesman confirmed that at the end of last year, after eight of its 16 suppliers in Zimbabwe went out of business, Nestlé Zimbabwe - its subsidiary in the country - started buying milk on the open market, some of it from Gushungo Dairy Estate.more