Sainsbury's have decided to no longer use Fairtrade certified tea and instead are creating their own equivalent scheme to replace the Fair trade middleman. This is being carried out in a similar way to how they ditched the Red Tractor logo on their products. The loss of the Fair trade logo on a premium product in one of the nation's biggest retailers seems to be causing havoc among those who hold Fairtrade dear to their hearts, but is this the beginning of the end of the Fairtrade scheme? Does Fair trade need to innovate to remain relevant?
According to Wikipedia "Fair trade is a social movement whose stated goal is to help producers in developing countries achieve better trading conditions and to promote sustainable farming." However, we need to consider that Fair trade is merely a scheme. In essence, Fair trade is based around financial traceability. Fair trade ensures that a greater amount of money from a purchased product goes back to the farm than would normally in a non-Fair trade product.
Interestingly, Fair trade does not guarantee the origin of products certified to their standard, this task is left up to the companies that sell Fair trade products. This leaves the scheme exposed to the risk of authenticity problems such as origin mislabelling or food fraud.
If the tea or the bananas being sold can't be guaranteed to be from the farm, how is the farmer going to receive the Fair trade price? If mislabelling in Fair trade products is occurring, this would dilute the price the farmers receive and also damage the reputation of the Fair trade scheme.
Furthermore, typically only 30% of what a ‘Fair trade’ farm sells actually receives the ‘Fair trade’ price. A recent publication by Fair trade states "Fairtrade cocoa farmers in Côte d’Ivoire are only able to sell around 13% of their cocoa on Fairtrade terms." The rest is sold at standard market price. Clearly this is a challenge Fair trade has not been able to solve, and it undermines the meaning of the scheme.
Given that one of the biggest retailers in the United Kingdom has decided to start getting rid of the Fair trade certification mark on their products, this could be indicative that it's time for Fair trade to innovate or die. The scheme is clearly not providing enough to keep the retailers interested, not providing enough to combat the risk of food fraud, and not providing enough to make sure farmers receive the price they deserve .
This should serve as a wake-up call to all scheme owners, including organic, that the supermarkets are looking for more value from the schemes that support their products. If they don't deliver this value, the supermarkets will do it themselves.