Is Fair Trade Fair?

1
Is Fair Trade Fair?

• Dr. Iain A Davies
• 19th June, 2008

2
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

3
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
  industrys 4C code

4
Well intentioned but under researched?
5
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
1968 1978 1988 1998 2008
2005 Nestle Launch Partners Blend
1997/1998 Starbucks first buy fair trade coffee
1985 TWIN founded
Source Davies, 2007
6
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 orgs values
P2
Uncertain area
Forbidden / Taboo Area
Allowed partners
P1
Growers
Marketing
Retailers
Importers
Advertising
Joint Brands
Distribution
Manufacture
Logistics
Source Davies and Crane, 2003, Davies, 2005
7
The Future of Fair trade
Market Participants
2010
2006
Source Davies, 2007
8
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?