An Ethical Dilemma for Consumers

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An Ethical Dilemma for Consumers Retailers?
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FAIRTRADE

• Fair Price
• Fair labour conditions
• Direct trade
• Democratic and transparent organizations
• Community development
• Environmental sustainability

Example of a FAIRTRADE Labeling organization
(FLO) Transfair
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Ethical Dilemmas

• Influence of FAIRTRADE label on Customer purchase
  intentions
• If a wholesale firm could source, say, only 40
  of its coffee from Transfair, should it bother to
  separate its sales into two brands?
• Trading in FAIRTRADE products the end of
  wholesaler or retailer responsibility?

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Influence on Customer purchase intentions

• Yes. Although this preference is linked to the
  price comparison of the products available
• Ready to pay 10-15 premium on FAIRTRADE products
• Adverse impact if the price difference is too high

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Branding Issue

• Separate Brands
• Individual Vs Community
• Ethical Coffee is Premium Brand, higher price
• Caters for society where everybody feels guilty
• Consumer forced to make ethical decision in
  supermarket aisle
• Combined Brand
• Short Vs Long and Individual Vs Community
• Producer is making ethical decision
• for consumer (relief!)
• Retailers need to advertise moral
• high-ground

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Is Transfair a cop-out for retailers?

• One hand wholesaler or retailers purpose is to
  provide its customers with a good products at the
  lowest price possible
• On the other hand, a wholesaler or retailer might
  need to do more in term of social responsibility
  and check that the supply chain is fair trade
  audited for all its products in stock.
• Especially relevant in Quasi-monopoly for food
  retailing like in Australia by
• Coles and Woolworths

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Ethical Dilemma

• Right Vs Right Paradigm
• Individual Vs Community
• Short Term Vs Long Term
• Truth Vs Loyalty
• Resolution Principles
• I Means to an End Australian customers Vs
  millions of growers
• II Rule Based Kantian principles
• II Golden Rule

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Resolution

• Coles and Woolworths could follow the example of
  Whole Foods Market
• Whole Trade Guarantee program, their in-house
  fair trade program
• Target of more than 50 FAIRTRADE products in 10
  years and in the long-term convert to only
  FAIRTRADE products imported from third world
  countries

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• Questions?