Fairtrade International started with the coffee industry, but now covers a range of products such as cocoa, fruit, cotton, flowers, tea and others. The established buyers of these products make up a niche market, which makes marketing for Fairtrade a challenge.
The Fairtrade and Fairmined dual certification for gold was launched across the United Kingdom on 14 February 2011, a joint scheme between The Fairtrade Foundation and The Association for Responsible Mining.
The global market
Between the late 1980s and the mid-1990s, multiple national initiatives following a fair trade system coexisted within Europe, the US, Canada, and Japan. In 1997, however, 17 national initiatives joined forces to create one international umbrella organisation called the Fair Trade Organization (FLO). FLO is based in Bonn, Germany, and has quickly become the largest organisation of its kind. FLO also has branches and field workers in Africa, Central and South America and China. The international fair trade label was introduced in 2002 to improve visibility for consumers. The Fairtrade producers did not like the way they were treated.
Marketing fair trade
A key part of the fair trade initiative is to inform consumers through innovative marketing. The marketing must create a value proposition for the initiative that encompasses the ethical side, as well as the quality of the product.
Fairtrade inspection and certification
In 2006, a Financial Times journalist found that ten out of the ten mills they visited had sold uncertified coffee to co-operatives as certified. It reported that they were "also handed evidence of at least one coffee association that received Fairtrade certification despite illegally growing some 20 per cent of its coffee in protected national forest land.
Certification costs and returns
Certified organizations such as cooperatives have to pay FLO-CERT a fee to become certified and a further annual fee for audit and continued certification The first year certification fee per unit sold as "Fairtrade certified" varies but has been over ¢6/lb (¢13/kg) with an annual fee of ¢3/lb (¢6.6/kg) to ¢3.4/lb (¢7.5/kg) for coffee up to 2006 in some countries, at a time when the "Fairtrade premium" was ¢5 to ¢10/lb (¢11 to ¢22/kg).
- Holahan, Catherine; Trebilcock, Bob (17 May 2011). "What to Buy at Walmart". CBS Money Watch. Archived from the original on 7 May 2012.
- Carter, Kate (14 February 2011). "Fairtrade hallmark sets the gold standard". The Guardian. Retrieved 20 December 2012.
- Nicholls, Alex; Opal, Charlotte (2005). "Fairtrade certification". Fair trade: Market-driven ethical consumption. London: Sage. p. 128. ISBN 1-4129-0105-7.
- Weitzman, Hal (9 September 2006). "The bitter cost of 'fair trade' coffee". The Financial Times Ltd. Financial Times. Retrieved 18 January 2018.
An emerging criticism of Fairtrade within the industry is that the organisation misleads consumers about its ability to monitor production practices. FLO Cert, a body officially independent of FLO, monitors the certification process. Critics say there is a need for an outside auditor. ‘The way Fairtrade promotes itself is a little irresponsible,’ says Mr Watts. ‘The certifiers need an external watchdog.’
- "Producer certification fees". FLO CERT Gmbh. 2013. Archived from the original on 29 January 2013. Retrieved 25 January 2013.
- de Janvry, A.; McIntosh, C.; Sadoulet, E. (2010). "Fair Trade and Free Entry: The Dissipation of Producer Benefits in a Disequilibrium Market" (PDF). Archived from the original (PDF) on 5 May 2011. Retrieved 24 December 2012. Cite journal requires