Is Fair Trade Fair? Dr. Iain A Davies 19th June, 2008
Principles of Fairtrade in 2000 • Stipulations of Fairtrade Foundation membership: • Members or Licence holders cannot be major multinational organisations • Members or Licence holders must purchase at least the agreed percentage of their product from certified and audited producers / importers • The Use of the term “Fairtrade” may only be used with the express permission of the Fairtrade Foundation
Common Criticism • Protectionist / price fixing • Market collusion • Destabilising • Brings price down everywhere • Not giving as much as is promised • Lies to consumers and to growers • Collusion with supermarkets • Corrupted by capitalism • Profiteering on morality • Exploitative of ethical consumers • Sold out on its principles to avoid being out competed • Rainforest Alliance , Utz Kapeh and the coffee industry’s 4C code
The Growth of Fair trade 1993 Cafédirect gets its first supermarket contract with Safeway's Scotland 1979 Traidcraft founded 1968 Oxfam Introduce fair trade pin cushions from Argentina 2003 CRG Begin own label FT 1998 Divine founded 1992 FtF founded Value 1978 Campaign Coffee and the Edinburgh Exchange set up 1991 Cafédirect founded 1989 IFAT founded Introduction/ Craft Mass Market Era Niche Market Era Solidarity Era 1997/1998 Starbucks first buy fair trade coffee 2005 Nestle Launch Partners Blend 1985 TWIN founded Source: Davies, 2007
The Moral Curtain Possible value chain partner selection based of values of the case organisations Niche Market Era Solidarity Era Mass Market Era Moral Curtain Distance from fair trade org’s values P2 Uncertain area Forbidden / Taboo Area Allowed partners P1 Retailers Marketing Importers Growers Advertising Joint Brands Distribution Manufacture Logistics Source: Davies and Crane, 2003, Davies, 2005
The Future of Fair trade Market Participants 2010 2006 Source: Davies, 2007
Ideology, business philosophy or sustainability? • What has fair trade become? • What is it going to ultimately be? • Who is it supposed to be helping and in reality does it? • Is it sustainable? And under how many definitions?