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Traidcraft PLC goes into administration

24 January 2023

‘Weak financial position’ of fairtrade company post-pandemic led to decision

Alamy

Traidcraft food products

Traidcraft food products

THE fairtrade company Traidcraft PLC is going into administration, its board of directors announced “with tremendous sadness” on Friday.

In a letter to its partners, the directors write that a myriad of events during the past few years had led to this decision. “The business has been in a weak financial position for some years and the Covid-19 pandemic presented a significant new set of challenges,” the letter says. “Just as we were emerging from the pandemic, like many other retailers, we faced the combined effects of the war in Ukraine, rising energy prices, and increased transport costs.”

Traidcraft PLC is the trading arm of the Traidcraft Foundation. In 2020, the revenue of Traidcraft PLC was reported as £5.4 million — down from £8.1 million in 2019.

Despite the “heroic efforts” of staff at its headquarters in Gateshead, the directors write that “low consumer confidence during the critical autumn trading period led to a sales result significantly short of what was required to sustain the operation. December sales were also negatively impacted by the uncertainty created by Royal Mail strikes.”

Administrators had been appointed as the “only honourable course of action” — and with haste — to “minimise the impact on our suppliers and creditors”.

“It is heartbreaking to bring the Traidcraft plc story to an end in this manner,” the letter continues, “but we can at least take some consolation from the knowledge that we have been a major force for good in the ethical retail sector for over forty years.

“We have championed the cause of trade justice to the point where we now have better standards and procedures in place to protect the rights and dignity of growers and producers all over the world.”

The directors conclude by offering “heartfelt thanks” to employees, board members, shareholders, and suppliers. “We would particularly like to thank our loyal band of ‘Fairtraders’, many of whom have been with us since the very beginning.”

Last year, its charitable arm, Traidcraft Exchange, rebranded as Transform Trade to “get to the point quicker” (News, 23 September 2022). Transform Trade will continue operating, the letter confirmed.

The chief executive of Transform Trade, Charlotte Timson, said on Monday: “We’ve been completely separate from Traidcraft since 2018, but we were really sad to hear the news. The company forged a path for ethical, cross-border trade. Back in 1979 there was no fairtrade label, no ethical coffee shops — now you can walk into any supermarket and buy a host of fairly traded goods. Hundreds of thousands of lives and livelihoods have been changed for the better because of the trail they blazed.”

She encouraged people to support next month’s annual Transform Trade Big Brew fundraiser.

David Marshall, who is the chief executive and founder of The Meaningful Chocolate Company — a former Traidcraft supplier which has its own separate online shop and distribution — described the news as a “huge loss”.

“Like many people we were unaware this was about to happen. Our thoughts are with the staff, suppliers and the growers who supplied the tea, coffee, sugar, chocolate and crafts. . .

“We have worked with them since the late 1990s and it is a huge loss. The UK fairtrade movement, as we know it, would not exist without Traidcraft. They helped set up the Fairtrade scheme. They campaigned to get Fairtrade into supermarkets.”

He continued: “When we first went to them with the idea of our Real Easter Egg, back in 2011, they were the only business which got what we wanted to do and helped send out our first eggs. They were a dedicated team of activists who changed the world by putting justice at the heart of trade.”

Traidcraft was established by Richard Adams as a faith organisation in Newcastle in 1979. Its first catalogue was hand-drawn, featuring a small selection of jute products from Bangladesh. Within two years, fair-trade tea, coffee, and subsequently a wide range of other food, clothes and accessories, paper and crafts, were introduced. Traidcraft has since worked with more than 100 producer groups in more than 30 countries around the world.

On Twitter, the Very Revd Michael Sadgrove, a former Dean of Durham, described Traidcraft as “A visionary, far-sighted enterprise that not only made a difference in fair trade practice but has helped shape western Christian attitudes to global poverty.”

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