The article in the url below contains some revealing facts and figures about the growing industry for Fairtrade-labeled products:
“Although Fairtrade products represented only 0.01 per cent of worldwide food and beverage sales in 2009, their revenues rose by more than 40 per cent annually between 1998 and 2007, by 22 per cent in 2008 and by 15 per cent in 2009. In some niches, the movement exercises considerable clout. Although Fairtrade accounted for only 1 per cent of the worldwide coffee market last year, it captured 20 per cent of UK retail sales of ground coffee.”
The quotes were taken from a report released last November by the Institute of Economic Affairs (IEA) titled ‘Fair Trade without the Froth.’ Interestingly:
“The cost of obtaining Fairtrade certification is relatively high: £1,570 in the first year. … In 2007, the four leading Fairtrade-certified nations were Mexico, Colombia, Peru and South Africa.”
The conclusion by the free-market-oriented IEA is that, contrary to many who believe in efficient markets, Fairtrade goods do not distort the free interplay of demand and supply. In essence, Fairtrade goods are luxury items, for which there is a demonstrated market demand:
“Buying Fairtrade chocolate no more distorts the chocolate market than buying a Louis Vuitton handbag distorts the handbag market. In both cases buyers are sending signals: that they are prepared to spend more on a bag with a prestigious label, or on chocolate that provides cocoa growers with a better life.”
Take care
David
Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/
No markets were hurt in making this coffee
By Michael Skapinker
803 words
9 November 2010
Financial Times
Asia Ed1
09
or
