The move by the world’s largest Fairtrade retailer to set up its own label for tea has divided retailers and been condemned by MPs, NGOs and tea producers

An almighty row has broken out in the small retailing niche of Fairtrade, which has prompted public outcry, led to questions in Parliament, and pitted one of the UK’s biggest supermarkets against the body that administers the Fairtrade certification scheme. In May, Sainsbury’s, the world’s biggest Fairtrade retailer, announced that it would start selling its own-brand tea under a new “Fairly Traded” label, rather than under the label of the Fairtrade Foundation.

Many tea plantations are located in Sub-Saharan Africa and South Asia, where poverty remains endemic. They also face challenges related to climate change as well as worker shortages due to urban migration.  Elsewhere, population growth is creating pressure on the livelihoods of tea smallholder farmers working already small plots of lands, says the Ethical Tea Partnership, which works with tea producers and smallholder farmers in its members’ supply chains to help them meet internationally recognised social and environmental standards. The industry is becoming increasingly concerned about how these issues will affect their supplies, as reflected by the fact that the ETP has welcomed some of the world’s highest-profile buyers – Typhoo, Fortnum and Mason, and Unilever – as members this year.

Fairtrade producers in Africa accused Sainsbury of acting in a way that was reminiscent of colonial rule

Sainsbury’s says its pilot aims to build on the Fairtrade model, “providing a guarantee that tea farmers will continue to receive all the funding currently in place, or more, including the minimum price guarantee and social premium to match Fairtrade levels – and crucially, additional benefits, including longer-term commercial relationships and individually tailored advice, data and specialist support on the ground,” the company said.

“The pilot will be underpinned by the highest and broadest set of sustainability standards, which go further than existing certifications to provide farmers with advanced information across social, economic and environmental aspects of their business.”

Sainsburys says its Fairly Traded pilot aims to build on the Fairtrade model (credit: Sainsburys)

But the decision immediately brought condemnation – not just from the Fairtrade Foundation, which was set up in 1992 by NGOs including CAFOD, Christian Aid, Oxfam, Traidcraft, Global Justice Now, and the National Federation of Women’s Institutes – but also politicians and consumers.

“The most significant issue is around the handling of the Fairtrade premium money,” says Tim Aldred, head of policy at the Fairtrade Foundation. “Our producers’ view was that this was very important money for them and they don’t want to lose control of that.” Under the supermarket’s scheme, the premium will be managed by the Sainsbury’s Foundation, which will use the money to create action plans to tackle issues such as climate change.

“We are taking the Fairtrade model of a minimum price and a premium to a much more strategic level of benefit to the farmers, in terms of dealing with issues such as environmental impacts and climate change,” says David Nieberg, head of media relations at Sainsbury’s.

However, in an open letter to Sainsbury’s, Fairtrade producers in Africa accused the company of seeking to disempower them in a way that was “reminiscent of colonial rule”. “Whilst we are open to new ways of working and forging closer relationships with customers, including Sainsbury’s, certain aspects of Sainsbury’s proposal, such as the proposed ring-fencing of the Fairtrade premium, are unacceptable. As producers, we are very aware that when consumers choose Fairtrade purchases, they expect the benefits to go directly to producers,” the letter added. The growers said another sticking point was the need for producers to apply to an advisory board based in London.

Waitrose and the Co-op both reiterated their commitment to Fairtrade, but Sainsbury’s is unapologetic 

Meanwhile, at least three petitions began circulating on the internet, calling on Sainsbury’s to reverse its decision, with the largest having gathered more than 98,000 signatures. In Parliament  more than 40 MPs signed a cross-party Parliamentary motion condemning Sainsbury’s move and calling on other supermarkets to “remain with and strengthen their commitment to Fairtrade certification”.

Waitrose and the Co-op both reiterated their commitment to Fairtrade, but Sainsbury’s is unapologetic about its move. “Fairtrade is 25 years old. The world has moved on but Fairtrade is not moving with the times. It is not bringing as much benefit to farmers as it could,” says Nieberg. “After 25 years of Fairtrade, still 10% of children are malnourished. As a concept, we are fully behind fair trade and ethical sourcing. Our aims are exactly the same but we don’t agree on the way to do it.”

Fairtrade producers in Africa likened Sainsbury's actions to a "colonial rule" (credit: Ethical Tea Partnership)

Of the farmers who wrote the open letter, he says: “These farmers are not part of the pilot. Those who are involved have been hugely empowered.” The Fairtrade Foundation has been “slightly misleading”, he adds. “To say that Sainsbury’s decides what happens to the premium – that’s just wrong. We have put additional safeguards in to ensure that the payments get to those they are meant to. It’s going to be independently audited and totally transparent.” Nieberg adds: “The one organisation that does lose out is the Fairtrade Foundation itself. They have been highly critical of this pilot without waiting to see if it delivers success.”

Fairtrade is 25 years old. The world has moved on but Fairtrade is not moving with the times. It is not bringing as much benefit to farmers as it could

However, Aldred counters that “we don’t feel that we have had meaningful comment from Sainsbury’s on this. We are worried that the ‘Fairly Traded’ label will confuse the customer and we would be happier if there was more transparency about the difference between the schemes.”

It will be hard to assess the success of the pilot scheme because producers are likely to be selling Fairtrade products to other buyers so it will be hard to differentiate the impacts of Fairtrade membership and the Sainsbury’s initiative, Aldred adds.

Simon Coley, co-founder of ethical soft drinks brand Karma Cola, says that while it is important to acknowledge the work done by supermarkets such as Sainsbury’s to create the idea of ethical products, “Fairtrade became well known because the supermarkets adopted it so that the concept would not be confusing for customers. If you have lots of different schemes you make it difficult for consumers.”

See also: Has Fairtrade passed its sell-by date?

Sainsbury's  Fairtrade  Fairtrade Foundation  Karma Cola  smallholders  FMCG  Ethical Tea Partnership 

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