Sustainability Watch - big business in Fairtrade
By Ben Cooper | 9 March 2012
Cadbury made headlines with its decision to switch Dairy Milk to Fairtrade
As Fairtrade Fortnight draws to a close, Ben Cooper examines whether the advent of big business has transformed more than just Fairtrade's market share.
The Fairtrade Foundation recently reported that estimated UK retail sales of Fairtrade-certified products reached GBP1.32bn (US$2.09bn) in 2011. Considering where the movement began - indeed where sales stood just five years ago - that figure is nothing short of astounding, exceeding not only what the doubters believed achievable but probably the most optimistic projection of any Fairtrade zealot.
And what is the basis for this growth? Patently, it is the engagement of large corporations. The sales of Fairtrade-certified Cadbury's Dairy Milk in the UK exceed total Fairtrade-labelled sales in the country, across all product categories, seven years ago. Contributions from the likes of Cadbury, Tesco, Nestle dwarf those of the pioneering Fairtrade brands.
But is their involvement the reason for the extraordinary development of Fairtrade? They may have multiplied Fairtrade's market share many times over but to afford them all the credit would be unfair on those who founded the movement and nurtured it through its early days.
It was the latter individuals and companies who originated an idea, set up a system and created a fledgling 'brand' that had both practicability and consumer appeal. They were also chief instigators of the ethical consumerism boom which provided the right market conditions for the major companies to engage.
So much for history. What of the future? If corporate engagement - and the volume growth it brought - stemmed from the viability of Fairtrade as a model and the consumer appeal it engendered, it follows that for the growth to continue, the underlying concept has to remain the same.
The critical question therefore is whether multinational engagement has changed the culture of Fairtrade? Is it by dint of their involvement, a different concept from that which the likes of Clipper, Traidcraft and Cafe Direct pioneered?
Externally, consumer perceptions around Fairtrade must have changed. From products bought in church halls by highly committed early adopters, Fairtrade now finds itself associated with products marketed by capitalist behemoths. It would be strange if that association - along with the ubiquity and normalisation it brings - hadn't altered how consumers view Fairtrade. This need not be a bad thing. It is simply a qualitative change which goes with the territory, and given the 77% consumer recognition the Fairtrade mark now enjoys, it is something the movement can certainly live with.
However, underlying changes to Fairtrade organisationally and culturally, and to what the mark stands for, would be an entirely different matter.
For a qualified view, just-food turned to Paul Chandler, chief executive of Fairtrade pioneer Traidcraft. Chandler stresses that engagement by big business has been positive, allowing the movement to help many more people, and that Traidcraft has been supportive of mainstreaming.
However, he says mainstreaming can alter the priorities of the labelling organisations, which will inevitably be giving more of their time to the big corporate clients. He says large companies may take the most expedient option of converting an existing supply chain to Fairtrade, possibly from a large plantation, rather than developing new supply chains among smallholders.
Companies will tend to view the mark as an ethical badge which they can place on products, albeit having met all the necessary criteria, rather than it being the tangible and consumer-facing element of a broader vehicle to improve the lives of producers. These factors, Chandler suggests, mean there is a risk the Fairtrade movement could lose its "developmental edge".
It should be borne in mind that Chandler's reservations are primarily a call for vigilance rather than a critique of where things stand now. Nevertheless, his concerns would be shared by many.
Richard Anstead, head of product management (grocery) at the Fairtrade Foundation, believes Chandler's concern over big companies squeezing out smallholders by converting existing supply chains from plantations to Fairtrade is valid but says there are already ways for the system to mitigate this impact. He says Chandler's suggestion that a proportion of the new throughput generated by a big company switching to Fairtrade be allocated to smallholders is therefore not necessary.
"The system does account for that," Anstead says though he is at pains to stress that the concern is a valid one. "I think if it was left unaddressed I would share that concern."
Addressing these issues in supply chains is "at the heart of what we do", Anstead says, adding that his work is directly concerned with helping Fairtrade licensees make the "right decision" regarding where to source, taking a "balanced approach" to the choice between existing supply chains and new smallholder partnerships. The individual criteria behind those decisions change "from commitment to commitment".
It should be pointed out that there is a strong developmental aspect to working with plantations, and Fairtrade can play a role in improving the lives of often impoverished plantation workers. Fairtrade has always included standards for both hired labour, pertaining to large estates and plantations, and smallholders. The specific standards vary from sector to sector. Fairtrade coffee, cocoa and sugar are only sourced from smallholders, while Fairtrade tea represents a mixture of hired labour and smallholders.
Coincidentally, the generic Fairtrade hired-labour standards are being reviewed this year, though Anstead says this is part of a general review process rather than a direct response to any particular concerns.
Anstead's role involves working closely with Fairtrade licensees, "large and small", and he maintains that the huge growth in business with major corporations has not distracted him from working with Fairtrade pioneer companies. He agrees with Chandler that the smaller Fairtrade-focused brands like Traidcraft, Cafe Direct and Divine bring something in development terms that the big companies do not.
Anstead also points to the movement's governance structure which gives power to the producers and allows for scrutiny by NGO partners, such as Christian Aid and CAFOD, as a means of guarding against any negative impacts of the increased corporate involvement in Fairtrade.
Both Chandler and Anstead referred to a change in October in the FLO/Fairtrade International General Assembly, whereby producers were given 50% of the voting rights. At present, that producer representation in the assembly comprises representatives of smallholder groups, and plantation owners, but not plantation workers, which could be seen as a weakness in the current structure.
Peter Williams, NGO coordinator at the Ethical Trading Initiative, believes the system needs to acknowledge that the plantation owners are commercial partners and it is the plantation workers who are the development partners, that is the direct counterparts to smallholder farmers. However, he says Fairtrade International is "seeking to correct that imbalance".
This year marks the fifth and final year of the Fairtrade Foundation's five-year strategy, Tipping the Balance, and it has achieved or exceeded many of its goals. Central to the development has been mainstreaming. As a consequence, Fairtrade is not only dominated by the large volumes the major corporations provide but its fortunes are now inextricably linked to negotiating the delicate relationship with big business and the dilemmas it can bring.
View next/previous articles
Currently reading -
Sustainability Watch - big business in Fairtrade
9 Mar 2012 -
9 Mar 2012 -