Retailers Take Hits For Fair-Trade Profiteering

Jun 08, 2004

By George Anderson

A report in the Wall Street Journal says the fair-trade movement has been helpful in generating better wages for farmers around the world. In some instances, however,
it appears as though retailers are the ones deriving the most benefit from appealing to the consciences of consumers.

Emily Dardaine, fruit-product manager at Fairtrade Labelling Organizations International (FLO), told the Journal, “Supermarkets are taking advantage of the (fair-trade)
label to make more profit because they know that consumers are willing to pay a bit more because it’s fair-trade.”

The article cited J. Sainsbury and Whole Foods fair-trade banana businesses to demonstrate the widely divergent approaches retailers are taking to marketing and selling these

J. Sainsbury is said to sell fair-trade bananas at “more than quadruple the price of conventional bananas — and more than 16 times what growers receive.”

Whole Foods, conversely, sells its fair-trade bananas at the same price as its organic bananas. A company spokesperson said, “We’ve taken a margin hit, but we feel that bringing
in the fair-trade bananas is the right thing to do for the farmers.”

Moderator’s Comment: What is your reaction to some retailers charging higher markups for fair-trade products while
others claim to take a hit? Is there a role for large organizations representing retailers and suppliers, such as NRF, FMI, NGA, PMA, GMA etc., to develop conduct guidelines to
try and bring a uniform sense of fairness to marketing and selling fair-trade products?

We have no problem with retailers making money selling fair-trade items. That’s what they are in business to do.

Our concern is that enough negative press will turn off consumers from purchasing these items and ultimately those whom this program intends to help (the
farmers) will be hurt.

George Anderson – Moderator

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

Be the First to Comment!