Is Fairtrade Finished?

Fairtrade changed the way many Western consumers shopped, but a perplexing trend is putting the very idea of fair trade in question — multinational companies are starting to abandon Fairtrade and start their own, in-house certification imitation schemes.

The idea behind Fairtrade was simple: if companies pay farmers equitably, the benefits would ripple out.

As from Samanth Subramanian from The Guardian explains, fair trade would mean “Farmers can hire adult workers, rather than employing children; they can send their kids to school, and buy medicines; they can improve the yields of their farms by using better fertilisers. Producers must meet a number of standards to qualify for Fairtrade: rules about labour conditions, for instance, or waste disposal. But for companies, the totality of their ethical responsibilities towards their producers is encapsulated by price.”

And that’s precisely where Fairtrade is running into trouble with giant multinational companies, many of which used to praise Fairtrade’s model:

Fairtrade’s success in helping to build a world of heightened expectations of sustainability is perversely paving the way to its own demise. Companies are losing faith in labels such as Fairtrade – losing faith in their ability to secure the future of farming and the future of commodities that drive corporate profit, but also losing faith that these independent stamps of sustainability carry any value at all any more.

Instead, the world’s giant food multinationals are taking matters into their own hands – setting up their own in-house certification programmes, appraising their own ethics to their own satisfaction.

Although the fate of Fairtrade is not necessarily the fate of fair trade, the former has kept the latter alive as an object of aspiration. A weakened Fairtrade portends the enfeebling of the very idea of fair trade. This poses a serious problem, because Fairtrade relies on companies to constitute one half of its virtuous bazaar.

Without the buyers, the Fairtrade bazaar folds up, and companies return to their own devices, to pursue only what’s best for themselves. Increasingly, companies are finding it easier and more expedient to produce their own certifications, said Trishna Shah, a Euromonitor analyst who tracks ethical labels: “A big change is happening.”

One of the biggest blows to Fairtrade came in May 2017, when Sainsbury’s — which had until then touted itself as the world’s largest retailer of Fairtrade products — announced it would stop selling Fairtrade tea. Instead, the company said it would start its own ethical label called “Fairly Traded.”

Sainsbury’s isn’t alone. We’ve seen confectionary giant Mondelēz – which owns Cadbury and Toblerone — start its own in-house certification scheme called “Cocoa Life.” Nestlé has its “Cocoa Plan”; Starbucks its “CAFE Practices”; Barry Callebaut, the Swiss cocoa producer, has “Cocoa Horizons”; US giant Cargill has “Cocoa Promise”; and McDonald’s has its own “McCafé Sustainability Improvement Platform”.

There are over 460 certification labels sitting on supermarket shelves, leaving consumers bewildered with “label fatigue.”

“I think companies are hoping that label fatigue is an enduring trend,” said Elizabeth Bennett, a political economist who co-edited the Handbook of Research on Fair Trade.

“They’re hoping that consumers are tired of learning what 30 different labels in one sector mean, and that we’ll all just think: ‘Any claim of sustainability is an improvement over no claim.’” This makes it easy for companies to resort to the ruse of “greenwashing” – pretending to be ethical without really being anything of the sort.”