This article was published in the February/March 2006 Wedge newsletter. The following information may be outdated.

On Fair Trade "Fig Leaves"

Equal Exchange speaks out on abuse of the Fair Trade system

Something odd, and possibly very disturbing, happened recently in the United Kingdom that should interest everyone who believes that Fair Trade can help create a more just, morally grounded global economy. Nestlé - the world's largest food conglomerate, and most boycotted company - recently introduced to the UK market its first ever Fair Trade Certified product, an instant coffee called Partners Blend TM. But so what? Large U.S. corporations have already jumped (or been pushed) onto the Fair Trade bandwagon. What's the problem? Don't we want corporations to move in this direction? Good point. We do. But what we're learning from the Nestlé example is that even a tiny bit of Fair Trade can go a long way to polishing even the worst corporate image, and all at the expense of real reform.

For example, a recent survey in the UK, where Fair Trade enjoys a high public profile, showed that as many as 75% of otherwise knowledgeable shoppers who support Fair Trade were, in fact, mistaken and thought that the Fair Trade Certified seal meant the company had been evaluated and judged to be free of ethical concerns. (See: this page). We see the same pattern in the U.S. The truth is the Fair Trade certification system examines only the individual products bearing the seal, and not companies. In the case of Nestlé it is estimated that, in fact, their Partners Blend represents less than 1/10th of 1% of Nestlé's annual coffee imports, leaving the other 99.9% purchased the same old way. Likewise, Nestlé's vast global trade in cocoa, sugar, dairy products, and dozens of other commodities remains unchanged. So, given the "Fair Trade glow" that Partners Blend might bring to the Nestl&eacute brand (in the UK at least) this small product launch could be a very inexpensive way to overhaul their tarnished reputation while leaving their business operations untouched.

What does this have to do with U.S. consumers? Plenty - the same rules that allow Nestlé to put on a Fair Trade figleaf in the UK market, apply in the U.S. as well. And that's why we at Equal Exchange are choosing to speak out, because we see this as the latest in a long line of actions by the world's largest food businesses to make small gestures that look good in isolation, but ultimately forestall real change for impoverished small farmers, and instead offer marketing, PR, and token efforts in its place. In the same month as Nestlé's product launch, two of the world's other largest coffee buyers also introduced Fair Trade Certified coffees, one in the U.S, and both as part of overall coffee product lines that are only 3% Fair Trade Certified, or less.

Certainly marketplace opportunism is not limited to the grocery store shelves. Examples are all around us. Just check out two non-profits who help spotlight environmental greenwashing, and firms who exploit breast cancer for marketing purposes: www.thegreenlife. org/greenwasherofthemonth.html and www.thinkbeforeyoupink.org. Conversely, Co-op America's Green Pages (www.coopamerica.org/pubs/greenpages/) can help you find companies who have a more authentic commitment to responsible conduct.

It could be argued that a corporation has to begin somewhere, and that these small product introductions at least represent a beginning - true enough. But there are signs to see if a corporation is sincere. Looking at just the realm of Fair Trade coffee - where we know something - here are some suggestions how large companies can make a convincing start:

  • Convert an existing product to Fair Trade status, one that already has an established customer base.
  • Offer consumers a variety of Fair Trade choices (regular, decaf, flavored, whole bean or ground, etc.).
  • Utilize Fair Trade ingredients (such as cocoa, tea, sugar) in the corporation's other products.
  • Most importantly, convert a significant portion of coffee imports (we recommend at least 5%) to demonstrate good faith, and steadily increase that % over time.

What's at risk? Corporate marketing machines making token use of Fair Trade certification can lead consumers to mistakenly associate some whole brands with Fair Trade. A false image of reform can undermine public pressure for real change.

At the inception of the Fair Trade movement 20 years ago it was intended to be an alternative approach to international trade that addressed the endemic poverty, economic vulnerability, and isolation of the millions of small-scale farmers who grow most of the world's tropical agricultural commodities, and as such challenge the status quo. It was not designed as a marketing device.

You can read the original Equal Exchange press release regarding Nestlé at: www.equalexchange.com/press-releases.