Fairtrade

[Emma Woolgatherer]

Latest post of the previous page:

The Co-op is the only supermarket Tyrrell's will deal with, their other outlets being small village shops ...

And Waitrose. But that doesn't mean that other supermarkets don't sell them. I know they managed to get Tesco to agree to stop selling their crisps, after lengthy discussions, but "Tesco does not need Tyrrell's permission to stock its crisps" (BBC News, 18 September 2006). My local Sainsbury's definitely stocks them. Presumably without Tyrrells' permission. I've also seen them in quaint little motorway service stations.

It does seem, though, that the slogan "Fair trade for our family farms" is aimed at the big supermarkets, which are seen as being unfair in their dealings with producers. Will Chase, the founder of Tyrrells Crisps, has said he was "forced to abandon his potato business six years ago because large supermarkets, led by Tesco, began sourcing produce from overseas to push down costs" (Guardian, 18 September 2006). It's an important issue, but I don't think it's helpful to confuse it with the issue of fair trade, which seems to be what Tyrrells is doing with that slogan, even if it's not a cynical ploy to win sales.

... shops, such as the one where I get my weekend treat packet. They also form part of my personal wine-and-crisps assisted plan to enjoy life while not littering up the world with another centenarian, which I hope you'll agree is wholly admirable

Admirable in intent. But I'm not sure you'll succeed, if you're managing to stop at just one packet a week. I couldn't manage that. I had to go cold turkey. (And no, I'm not talking about a flavour.)

Emma

[Emma Woolgatherer]

The whole concept of "Fairtrade" is fraught with conundrums ...There is an automatic assumption that Fairtrade is required because of monopsonistic buyers, whereas in fact the low price is caused by oversupply. To encourage greater supply by giving a selection of producers more money makes the problem worse not better ...

So say the Economist and the Adam Smith Institute.

At a premium price. An extra 10p perhaps? The buyer gets a cup of coffee and a warm feeling ... the grower may get an extra penny perhaps, the other 9 pence disappearing in waste and profits for others, including the coffee-shop.

Is this still true? I gather that it was economist Tim Harford who discovered that Costa Coffee was doing that, and he contacted them for an explanation. "'Costa Coffee then stopped charging 10p more for Fairtrade coffee,' says Harford. 'It's now a free option at Costa. To my knowledge, there are no longer any coffee bars in the country that charge extra for Fairtrade. I'd challenge your readers to find one'" (This Is Money, 17 August 2006)

I have quite deliberately put a provocative one-sided argument. I am not necessarily against "Fairtrade" in spite of what I have written, and do tend to buy "Fairtrade" coffee, tea and chocolate, but I think it is very important that people have a better awareness of some of the issues involved.

I agree. But it's difficult to work it all out, isn't it? Difficult to separate information from misinformation. Every side has its axe to grind. The Fairtrade Foundation has provided a response to the Adam Smith Institute report, but as far as I can tell it hasn't received anything like the attention that the report did. I'd be interested to see the March issue of Which that Ted mentions.

Emma

[Nick]

Hi Emma, and thanks for your response.

I was not consciously aware that the Economist had supported such a view, but as I do read it, it is quite likely to have lodged in my brain somewhere. I did not know that the Adam Smith Institute had commented on this subject, though it does not surprise me. I haven't made a study of their recommendations, but think their contributions are valuable, if only to highlight where political options (which may be the right ones, or the only ones) are chosen. They do come across as pretty heartless though, which doesn't help them (or anyone else) much.

I have read Tim Harford's book, and his column in Saturdays' FT, as well as "Freakonomics", which also takes an economists eye-view of the world. I'm happy to accept that Costa Coffee and others no longer charge a premium, because of the adverse criticism which may result. However, this does not imply that they are not able to charge a higher price on all their coffees or maybe sell more of them because they champion Fairtrade coffee. In other words, their profits are higher as a result of using Fairtrade. Higher than their profits would be if they did not. I suggest the same is true of MacDonald's using free-range eggs. (It doesn't make it a bad thing to do, of course).

Thanks for the reference to the Fairtrade site. Very interesting, but I think their refutation is not that great. I'll try to review it in a few days. But again, this doesn't mean it's not the best we can hope for in present circumstances.

The Which report will also make interesting reading, though I am not a fan of their reports. Some of their financial reports have been frankly shocking, not least because they have made diametrically opposed recommendations at different times, but still try to claim they are holier than thou. I am very pleased that Mick Macateer no longer works for them.

[jaywhat]

I am so pleased that this is getting talked about.
I have not let my Tyrells issue drop yet - or my knickers, even if they are in a twist, Fran.

[tubataxidriver]

A little bit more intelligence on the UK part of Fairtrade (http://www.fairtrade.org.uk/). It is linked to a number of worthy development charities like Oxfam, etc., but my contact detects a very strong Christian slant in its activities - Christian Aid, CAFOD, etc.

[Emma Woolgatherer]

But surely it's an offence under the Trade Descriptions Act to make false or misleading statements about a product. And that includes "the use of any ... indication or statement likely to be construed as, indicating that the goods or services conform to standards issued by any body or authority". While that probably couldn't be said to be the case with Tyrrells crisps, because they use the words "fair trade" in a slogan rather than a claim, surely it would have been the case if they had plastered FAIR TRADE in large letters on the front of their crisp packets, even without any certification mark?

No, you fool, it wouldn't. I've asked people who know about such things, and I've come to the unavoidable conclusion that tubataxidriver was perfectly right and I was wrong. Even if Tyrrells had put FAIR TRADE in big letters on their crisp packets, and made no other claims, it would not have been an offence under the TDA, because [---][/---] contrary to my claim above [---][/---] the words "fair trade" do not have a legal definition, or even a widely and clearly understood definition. They're just too vague. And "fair" is especially vague.

In fact, UK farmers and others seem to be making a concerted effort to broaden the understood meaning of "fair trade" to include fair dealing between British farmers and British retailers, especially big supermarkets like Tesco. See, for example, Fair Trade Begins at Home (Manx National Farmers Union). And: "West Sussex retailer Crumbs has launched what it claims to be the first fair trade scheme for UK farmers and producers. Suppliers within a 40 mile radius will be paid a premium price of at least 5% over what suppliers from further afield will receive. Crumbs wanted to apply the fair trade concept seen in countries such as India, closer to home" (NFU Food Chain Newsletter, July 2007). And: "There is much hype from supermarkets on fair trade products [---][/---] is it unreasonable to expect fair trade for British dairy farmers?" (Tim Brigstocke, Chairman of the Royal Association of British Dairy Farmers, Yorkshire Dales Country News, 12 October 2006).

So it's not just Tyrrells. And I don't think they were attempting to mislead anyone with their "Fair trade for our family farms" slogan. I think they were making a point. The same point that was being made in the examples above. And it's something they clearly feel strongly about. So, Jaywhat, when you wrote that Tyrrells recent reply to you "was not at all serious", I think you were wrong. I think they were being very serious. Just not particularly helpful.

Emma

[jaywhat]

I have referred to Fair Trade in the thread on Primark.

[Parapraxis]

I have not had a chance to read all the replies, so sorry if somebody has already made this point.

Whilst I think that Fairtrade is a good idea (i.e. giving the producers their "fair share"), from the supermarket's end I think it is a bit a con because I am sure that supermarkets could offer Fairtrade products at the same prices as normal products and still give the producers their cut.

[Emma Woolgatherer]

Whilst I think that Fairtrade is a good idea (i.e. giving the producers their "fair share"), from the supermarket's end I think it is a bit a con because I am sure that supermarkets could offer Fairtrade products at the same prices as normal products and still give the producers their cut.

Sometimes they do. All Sainsbury's bananas are now Fairtrade, and the prices haven't increased. I don't see why they always should, though. Fair trade isn't about charity. It's about showing how trade can "work" for the benefit of producers, wholesalers and retailers alike. There's no obvious reason why supermarkets should reduce their profit margins for fair-trade products; they should treat them like any other products. So I don't agree that it's a bit of a con [---][/---] as long as the producers genuinely do get a fair price (and perhaps that's debatable) and the retailers aren't increasing their profit margin for fair-trade products. If you know of any evidence that they are doing that, I'd be interested to hear about it. There is a much-quoted article, "Fairtrade Fat Cats" by Philip Oppenheim, published in the Spectator back in November 2005, which claims that supermarkets and middlemen are getting rich on the back of fair trade. But I think there has been a lot of change since then. In fact, it may be that the article prompted a lot of that change. No doubt there's still room for improvement. But there's even bigger room for improvement, in my view, when it comes to the products that aren't fair trade.

I know that there are complex economic arguments against fair trade [---][/---] which Nick touched on above [---][/---] although I admit that I struggle to understand them. And I do accept that a little scepticism about the merits of fair trade is healthy. But one should be equally sceptical about the arguments against it, and consider the sources. Some of the strongest critics of fair trade [---][/---] e.g. the Cato Institute in the United States, the Institute of Economic Affairs and the Adam Smith Institute in the UK [---][/---] are advocates of unadulterated free-market capitalism, and opposed to any kind of wealth redistribution, and I find many of their claims completely indigestible. That's not to say that all critics of fair trade are free-market capitalists, or that all criticisms are worthless. But there is a tendency to build straw men: many critics point out that fair trade is not a panacea that will end global poverty, but organisations such as the Fairtrade Foundation have never claimed that it is. Fair trade can only ever be one of a range of tools, and I think that on balance it's a useful one. So I shall carry on buying Fairtrade products, while trying to keep an open mind.

Emma

[Parapraxis]

Emma -

I understand what you are saying and agree with it up to a point; why should supermarkets reduce profit margins?

I suppose one thing I would consider is if supermarkets having Fairtrade products at relatively high prices, and their own brand products at relatively low prices, is it ethical? I suppose Fairtrade itself is not a con, because the money does go back to the producers but perhaps the way supermarkets use, or arguably exploit, Fairtrade products should be addressed.