9th March 2011

The innovators of Fairtrade

If you've walked past an Oxfam shop this Fairtrade Fortnight you might have noticed a rather fetching poster in the window showcasing the fact that they sell various "Fairtrade masterpieces".

masterpiece.jpg

The poster features products from Liberation Nuts, Traidcraft, Tropical Wholefoods, Divine Chocolate and Cafédirect - and Oxfam have also produced a little recipe leaflet to use with them.

What do these organisations all have in common? They are all what you might call Fairtrade social enterprises. They don't only adhere to the Fairtrade standards: they go well above and beyond them, and they have been integral to the development and growth of Fairtrade in the UK.

The Fairtrade Foundation has recently recognised the role of twelve such innovators by publishing a short, attractive guide called Doing Business Differently - the companies leading the fair trade vision to transform trade.

The opening paragraphs of Doing Business Differently are an eloquent summary:

Some companies were created to make trade fairer. It’s not business as usual, or even business with added extras, these companies have created entirely new business models with producers at the heart of all they do.

Some of these companies have been building fair trading partnerships and new opportunities with producers long before the FAIRTRADE Mark existed. Their pioneering work made many of the big Fairtrade switches by multinational companies possible and they continue to lead the way on new products, new opportunities and new ways of trading. Fairtrade wouldn’t be where it is today without them and their work is vital to the future of Fairtrade.

With UK Fairtrade sales topping £1bn in 2010 and still growing at a spectacular rate, these dedicated Fairtrade companies now account for quite a small proportion of overall sales.

They also face stiff competition from multinationals and big retailers selling Fairtrade products, who can hugely outspend the smaller dedicated Fairtrade companies on marketing.

At the same time the big players are not holding themselves to the same standards. Some of the original Fairtrade standards, such as those around traceability and pre-financing for producers, have come to be seen as aspirational extras rather than a core part of the Fairtrade deal.

The supermarkets, who can use their massive power in the supply chain to dictate the terms of trade and sell own-label Fairtrade products at lower prices, risk creating a downward trend in prices that ultimately is not sustainable for any other Fairtrade suppliers to compete with.

There are lots of creative proposals to tackle these issues, but the key first step is to recognise and acknowledge this difference between mainstream businesses and Fairtrade social enterprises.

As Fairtrade has scaled up it has drawn in companies primarily interested in the commercial potential of the movement rather than its ambitions to empower producers and transform global trade.

This has enabled Fairtrade to grow rapidly, benefitting millions of producers. But we have to recognise that these businesses are just partners of convenience; there is no prospect of them pushing the Fairtrade agenda towards the next frontier. For that we'll always need a different kind of business.

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