Grace Mugabe, the wife of Zimbabwean president Robert Mugabe, owns dairy farms that sell up to a million litres of milk a year to food giant Nestle, London's Sunday Telegraph reports.

Grace Mugabe took over six of the country's most valuable white-owned farms around 2002, the newspaper said.

Mugabe, his wife and other members of his administration are the subject of European Union and United States sanctions as a result of their controversial 29-year rule over once-prosperous Zimbabwe.

Nestle, the multinational food company which is the largest customer of Grace Mugabe's dairy farm, is not obliged to comply with those sanctions as its headquarters are in Switzerland, the Telegraph said.

Switzerland has its own set of measures, but Nestle insists it has not broken Swiss law.

On Saturday, the Daily Telegraph reported that Robert Mugabe himself had built up a secret personal farming empire including at least five white-owned farms from which the owners were forced out.

According to the Sunday Telegraph, Grace Mugabe's properties total about 12 000 acres, but her most important is Gushungo Dairy Estate, formerly known as Foyle Farm. It is located in Mazowe, about 10 kilometres north of Harare.

The farm is managed by Russell Goreraza, her son from her first marriage.

Her biggest customer, according to her staff and other industry insiders, is Nestle Zimbabwe, the local subsidiary of the Swiss company, the newspaper reported.

According to farm staff, the dairy's only other customers were personal callers at the premises.

When the Sunday Telegraph visited the farm, the milk cost US$1 a litre.

A spokesperson at Nestle's global headquarters in Switzerland told the newspaper that in 2009 the company started purchasing milk on the open market from various suppliers on a strictly non-contractual basis.

"In certain instances, the milk available in the market would be from Gushungo Dairy Estate," the spokesperson was quoted as saying.

"During the recent crisis, Nestle has not considered moving its operations out of the country. By providing basic food products to Zimbabwean consumers, Nestle aims to meet the needs of the local population, many of whom are vulnerable and disadvantaged."

The newspaper also reported that pay and conditions for workers at the dairy were meagre.

A 25-year-old worker, with a child to care for, said she could not afford to buy the milk at US$1 a litre.

"I get US$40 a month, yet we sell lots and lots of milk," she told the Sunday Telegraph.

"Mrs Mugabe is here a lot, but doesn't talk to us, just the managers," she said.