Sainsbury’s executives met farmers from some of Africa’s biggest tea-growing co-operatives in a hotel in Nairobi last month where the world’s largest retailer of Fairtrade products precipitated the greatest crisis in the scheme’s 25-year history by telling the 13 major tea groups and their 228,000 co-operative members that it intended to drop the globally known Fairtrade mark for their produce, and replace it with the phrase “fairly traded”. Iit is now feared that bananas, sugar, chocolate and dozens of other Fairtrade lines sold in the company’s 2,100 stores will eventually be withdrawn from Fairtrade as the company rolls out its own ethical trading scheme.
In place of the strict rules devised by farmers’ groups working with independent development experts to guarantee consumers that small-scale farmers are being rewarded with decent pay and bonuses, the £23bn-a-year retailer said it planned to set up its own in-house certification scheme, set new ethical standards and introduce a different way to pay the groups. The farmers at the meeting with Sainsbury’s, mostly from Malawi, Rwanda, and Kenya, were nonplussed. “Why change a system that has worked well for 25 years for both poor farmers and large supermarkets?” asked one. Had not the supermarket reaped tens of millions of pounds’ profit and huge moral kudos by pioneering Fairtrade and inviting customers to pay a bit more for their produce?
Sainsbury’s is just one of many large food and drink companies rethinking their supply chains, looking to cut costs and devising their own environmental and labour policies. Because Sainsbury’s is so important for Fairtrade, the company’s move could be the beginning of the end of the scheme, and lead to lower social and labour standards, more hardship in developing countries and deep confusion among consumers, say some development and ethical trading groups.
“This move by Sainsbury’s represents a tip in the balance back to the powerful retailers,” says Sophi Tranchell, managing director of Divine Chocolate, the highly successful ethical trading company part-owned by tens of thousands of cocoa farmers in Ghana.
To add to the woes of the Fairtrade brand, it was revealed last week that Tesco will move all its own-label coffee from Fairtrade to another ethical certification scheme, the Rainforest Alliance and it follows a similar announcement by the retailer earlier this year that it will do the same with its own-brand tea.
The fractious Nairobi meeting made clear the despair felt by small farmers at the global trading system, in which supermarkets and shippers make big profits from importing raw produce from developing countries but barely anything goes to the farmers. Oxfam, Cafod, Christian Aid, the Women’s Institute and several major ethical trading and co-operative groups together representing millions of consumers, urged it to rethink its plans.
“We feel that our rights are being taken away from us, this feels like colonialism,” said one man at the meeting.
“We want to be partners and friends. You want to control me," said another.
Sales of Fairtrade products are said to be slipping and the company feels it is not getting value for the £60m which it says it has “invested” in ethical trading since 1994. Although it sells nearly £200m of Fairtrade produce a year, overall company profits dropped 8% last year and in a fierce retail environment it now wants more credit for investing in poor farmers.
Mike Gidney, chief executive of the Fairtrade Foundation explained, “Sainsbury’s call it a pilot scheme, but it’s over no defined period. Where is the detail? Who will administer it? Does it have enough staff? This is unacceptable and we must draw a line. The suspicion must be that they are trying to save costs. The question is why have they changed for what may be an inferior scheme?”