Move by UK supermarkets threatens to bring Fairtrade crashing down

When four Sainsbury’s executives met farmers from some of Africa’s biggest tea-growing co-operatives in a hotel in Nairobi last month it should have been a mutual celebration of Fairtrade, the gold standard of ethical trading and the world’s most trusted and best-known food certification scheme.

But instead of backslapping at the Pride hotel, the world’s largest retailer of Fairtrade products precipitated the greatest crisis in the scheme’s 25-year history by telling the 13 major tea groups and their 228,000 co-operative members that it intended to drop the globally known Fairtrade mark for their produce, and replace it with the phrase “fairly traded”.

In place of the strict rules devised by farmers’ groups working with independent development experts to guarantee consumers that small-scale farmers are being rewarded with decent pay and bonuses, the £23bn-a-year retailer said it planned to set up its own in-house certification scheme, set new ethical standards and introduce a different way to pay the groups.

From next week the company will no longer label its Gold, Red and other bestselling own-brand teas as “Fairtrade” but will call them “fairly traded”. Officially it is a pilot but the suspicion is that Sainsbury’s will then roll out the new standard across other products including bananas and coffee.

To add to the woes of the Fairtrade brand, it was revealed last week that Tesco will move all its own-label coffee from Fairtrade to another ethical certification scheme, the Rainforest Alliance. According to the Grocer, an industry magazine, this is likely to happen in 2018 and follows a similar announcement by the retailer earlier this year that it will do the same with its own-brand tea.

The farmers at the meeting with Sainsbury’s, mostly from Malawi, Rwanda and Kenya, were nonplussed. “Why change a system that has worked well for 25 years for both poor farmers and large supermarkets?” asked one. Had not the supermarket reaped tens of millions of pounds’ profit and huge moral kudos by pioneering Fairtrade and inviting customers to pay a bit more for their produce?

And in return for meeting Fairtrade’s high social, labour and environmental standards, the small farmers have also benefited to the tune of millions of pounds from the British consumer’s sense of fair play. “Has not everyone gained?” the tea farmers asked.

But the Nairobi meeting was significant because Sainsbury’s is just one of many large food and drink companies rethinking their supply chains, looking to cut costs and devising their own environmental and labour policies.

Because Sainsbury’s is so important for Fairtrade, the company’s move could be the beginning of the end of the scheme, and lead to lower social and labour standards, more hardship in developing countries and deep confusion among consumers, say some development and ethical trading groups.
 

 

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