Nestlé stirs up trouble for Fairtrade Foundation

The Fairtrade Foundation is at a turning point in its 11-year history. Nestlé, which has attracted a number of boycotts from ethical consumers, is understood to have applied for the Fairtrade mark for its new coffee brand, Partners Blend.

The foundation now finds itself in a quandary – determining whether it is acceptable to award the mark to a product made by a company that has had its working and marketing practices called into question, and if it is qualification enough for a product to meet the foundation’s criteria. To date, the Fairtrade Foundation has awarded the mark on a product-only basis. If a product meets the standards set by FairTrade Labelling Organizations International (FLO), then that product can be awarded the mark.

However, there is a clause in the policy that states the FLO can reserve the right to exclude companies that are involved in “behaviours that are so bad the FLO’s association with the trader would seriously undermine the legitimacy of FLO Fairtrade in the minds of consumers”.

This is exactly the issue that concerns some foundation supporters and food producers, including those that have already been awarded the mark. It is likely to face criticism whatever decision it reaches on Partners Blend in the autumn.

Baby Milk Action (BMA), the lobby group at the forefront of Nestlé boycotts, has wasted no time in calling on the foundation to refuse to award the mark. BMA group policy director Patti Rundall believes awarding the mark to Nestlé – which, according to BMA, systematically violates children’s rights – would “make an absolute mockery of what the public believes the Fairtrade mark stands for, and show disregard to the feeling of thousands of people who have worked hard to promote the principles of fair trade”.

Many industry observers do not see Nestlé’s decision to apply for the mark as a signal that it plans to change its practices. They believe it is more likely to lead to the launch of a range of niche products aimed at consumers who aren’t usually attracted to Nestlé brands. John Hilary, director of campaigns and policy at development charity War on Want, points out that Nestlé’s website describes fair trade as “one alternative” to help eliminate poverty among farmers.

But another industry insider believes the foundation must seriously consider the other side of the argument Рthat Nestl̩ will bring significant marketing resources and new consumers to fair trade. If Partners Blend is awarded the mark, it would help raise awareness of the foundation and its work. If Nestl̩ is rejected and decides to put its own fair trade logo on the produce, it could confuse consumers about what constitutes fair trade and reduce the currency of the Fairtrade brand.

The foundation has been applauded by its supporters for consulting them before it makes a decision, but the situation has left many people questioning its future role. ActionAid policy analyst Julian Oram believes the issue will spark a review of how the foundation works, regardless of the Nestlé decision. He believes that now fair trade has good penetration, the foundation should use Nestlé to its advantage.

Oram says: “It needs to be systematic in its engagement with consumers, and could make suggestions about how companies can improve in other areas. It should use its muscle now to push the fair trade market forwards.”

Nestlé says it will communicate with customers about its fair trade plans once it is in a position to do so and will not comment on commercial speculation.