SOMETHING rather worrying is happening with the Fairtrade Foundation. When I first got involved with the movement, 25 years ago, it was a marginal enterprise selling packs of unpalatable coffee from battered cardboard boxes at the back of the church. Today, it has grown into a global retail business: consumers spend more than £6 billion on Fairtrade products, and so help to give a fair deal to 1.6 million poor farmers in 75 countries worldwide. Now all of that suddenly seems at risk.
Sainsbury’s has announced that it is intending to stop selling tea marked with the official Fairtrade certificate. It plans to replace it with its own “fairly traded” logo. The Fairtrade mark, which is independently verified by outside experts, will be replaced by “own-label” ethics — for which Sainsbury’s will set the standards internally, with no outside scrutiny.
Grocery analysts believe that Sainsbury’s intends then to do the same thing with bananas, coffee, and all of its other Fairtrade products. This is serious. Sainsbury’s has long been the market leader on fair trade. Others will follow its example. Tesco, M&S, Costa, Starbucks, and McDonald’s are said to have all devised their own schemes, as have the manufacturers Unilever and Cadbury. If enough big companies pull out, the Fairtrade mark could collapse, as their contributions finance its inspections.
Sainsbury’s has told tea producers in Malawi, Rwanda, and Kenya — who represent 228,000 farmers in co-operatives — that it will pay them the same prices as under the Fairtrade scheme. The risk is that such promises could fall away, once retailers are not subject to scrutiny from outsiders. Accountability is a key hallmark of the Fairtrade certificate.
It is more than just a fair price that is at stake. The Fairtrade mark has rescued hundreds of thousands of poor farmers who were previously being exploited by a loaded global commodity-trading system. Guaranteed minimum pricing has ameliorated that for certified producer groups; and, last year, they received an additional £150 million in “social premium” payments invested in schools, clinics, housing, sick pay, and pensions in their local communities.
Sainsbury’s, where overall company profits dropped 8.2 per cent last year, is said to believe that it is not getting value for the £60 million that, it says, it has invested in ethical trading over the past two decades. Sales have stopped growing. Even so, the supermarket sold almost £200-million worth of Fairtrade produce last year.
The Fairtrade mark ought to be a win-win: good for producers; good for the companies, in terms of significant sales volumes; and good for consumers, who know that we can cast a moral vote with every pound that we spend. Destroying independent scrutiny through in-house schemes will cut costs for the supermarkets, but at the expense of increased hardship among the world’s poorest people.
Campaigning groups such as Oxfam and Christian Aid will be forced to respond to this with undercover investigations, assisting journalistic exposés, and organising consumer boycotts of the kind deployed in the past against manufacturers of cheap clothing, sportswear, and trainers. If that happens, Sainsbury’s could well be the loser. It should think again.