Fairtrade can’t rest on its laurels

On its tenth anniversary, the Fairtrade Foundation has good reason to celebrate its achievement. Equally, it will need to think hard about the challenges of the next ten years, because challenges to ethical trading policies there certainly are; and they are mounting fast.

First, though, the flavour of achievement. In what is a comparatively short time, the UK has become the second-largest market for fair trade goods after Switzerland. Growth is still dynamic: an estimated &£90m sector in 2003 showed 46 per cent increase on the previous year. Thanks to the efforts of the foundation, which is dedicated to brokering a better deal for Third World producers, the Fairtrade mark now appears on more than 250 UK products. Though the existing portfolio is skewed to coffee and chocolate brands, it should be remembered that some of these have become really quite big. Cafédirect, which launched the first Fairtrade coffee in 1994, is now the sixth-largest UK coffee brand.

In these circumstances Fairtrade could reasonably be expected to scale up its ambitions. No surprise, then, that that is exactly what the foundation is doing. It is hoping for a doubling of sales every two years, partly spurred by diversification into new areas such as cotton, fruit and flowers.

As fair trade moves from niche to mainstream, however, it will face two major, though linked, problems. The first is one of definition. Many people have only a hazy notion of what “fair trade” actually means. In a recent survey, 21 per cent still didn’t know what it was about, and a further 21 per cent thought the mark was the symbol of the Office of Fair Trade (sic). More importantly, there is common confusion between the Fairtrade mark as a badge of provenance (which it is) and a badge of quality (which it is not, except fortuitously). This confusion and ignorance do not seem to have mattered too much in the early years. The designated goods traded off the idea they were somehow a charitable and altruistic purchase for the initiated. It is less clear how these attributes will favour the fair trade concept in the future. Indeed, a quality dimension may be exactly what is needed, from a marketing point of view.

But not necessarily from an ideological point of view: Fairtrade must be equitable towards all its suppliers, not just a chosen few who happen to be better producers. In any case, the implementation of quality is costly and difficult. And here we touch upon the second problem: money, or rather lack of it.

It might be thought that tapping extra financial resources was not a problem for a successful movement. After all, the Co-op has now become a Fairtrade champion, accounting for nearly ten per cent of total sales; and both Sainsbury’s and Tesco have launched own-label fair trade ranges. Perhaps even more significantly, Nestlé, one of the world’s biggest coffee producers, is plotting a premium fair trade product; and Kraft may not be that far behind. These companies routinely spend millions of pounds on marketing every year, only a little of which would be a godsend to the Fairtrade Foundation in its mission to explain more clearly what it’s about.

But the foundation, like any ethically based organisation, must be extremely wary about whom it partners. A Faustian pact is the quickest road to perdition.

Stuart Smith, EditorCover Story, page 24

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