Expert Comment: Fairtrade FortnightWednesday 25 April 2012
Dr. Bob Doherty, Head of Liverpool Hope University Business School
Monday 27th February marks the start of Fairtrade Fortnight 2012, the annual campaign that raises the awareness of fair trade. Fair trade is a social movement which sprang from an ideology of encouraging community development in some of the most deprived areas of the world. Its origins begin in the faith based charity sector in 1960’s and 1970’s bringing craft products from rural Southern Hemisphere communities to the richer markets of the North.
In the 1990s the fair trade social enterprise pioneers Divine Chocolate Ltd and Cafedirect decided to develop high quality brands to compete in the UK mainstream and made breakthroughs into multiple supermarkets and sales grew in 1999 to a level of £19 million per year.
Since 1999 the growth of fair trade has been spectacular; the UK has risen above the USA as the biggest market for fair trade products and is now worth £1.17 billion. There are now in the UK over 4,500 distinct Fairtrade Marked products, when in 1993 there was only three Fairtrade marked products in the UK. This rise in sales is not only limited to the UK, as global sales of certified fair trade products in 2010 now stand at £4billion, up 28% from 2009.
Fairtrade Marked goods are now available in 24 different countries and in a recent survey, Fairtrade was the most widely recognised ethical label globally. Activists and campaigners have played a vital role in this success, particular groups such as Christian Aid, Comic Relief and Oxfam to name just a few who were instrumental in putting pressure on the supermarkets to originally stock fair trade products. In addition, you have the phenomenon of Fairtrade towns up and down the UK with the last count standing at 553 such towns.
The fair trade movement has consistently harnessed market mechanisms to drive social change through global consumption patterns showing that the market can reward social justice. Obviously recent growth has been down to both large multiple supermarkets with the Cooperative food group being the first making conversions to Fairtrade. Since 2007 large multinationals have been persuaded to switch to trade on fair trade terms.
Firstly, Tate and Lyle in August 2007 announced that all its retail sugar would be fair trade certified by 2009, secondly, in November 2008 Starbuck‘s announced conversion of all coffee to fair trade in its 700 UK coffee shops. Thirdly, in March 2009 Cadbury’s (now owned by Kraft Foods) announced they were to certify Cadbury’s Dairy Milk chocolate bars, their chocolate drinks and the packaged cocoa range, worth a UK retail value of £200 million. Then in December 2009 Nestle announced the conversion of Kit Kat to fair trade, sourced from cocoa farmers in the Ivory Coast and more recently Mars announced its intention to convert Malteser’s to fair trade.
This growth has delivered significant producer impact with 827 producer organisations representing 1.2 million farmers in 60 countries benefiting from fair trade sales. Fairtrade works because it allows consumers to make a difference via their own consumption by switching to fair trade products. It’s not charity as farmers are paid both the fairtrade and social premium at source for their raw material. Some fairtrade pioneers such as Divine and Liberation CIC have gone a step further by including producer groups as shareholders in the venture creation and this has led to real knowledge transfer and the strengthening of the producers in global supply chains.
This growth has not come without its own tensions with some commentators accusing supermarkets and multinationals of both attempting to dilute and some of the original fair trade principals and for not converting more of their overall turnover to fair trade. While I have some sympathy with this viewpoint one cannot deny the growth in scale and economic impact for producers and the improvement in overall standards of behaviour by some multinationals in their international supply chain management.
To find out more about the story of fairtrade so far and the next steps for Fairtrade please come to the Foundation Hour at Liverpool Hope University on Wednesday 29th February at 1-2pm at the Hope Park Campus Lecture Theatre L where I will be explaining in more depth the growth in fairtrade.