How Fair is Fair Trade?

In Beastly & Beautiful, Professional Life, Random by Louisa Leontiades

When I look at recent reports on Fairtrade and Cadbury, I see that both Fairtrade and Cadbury are doing well out of their alliance. In 2009, when Cadbury Dairy Milk  went fair trade and started boasting the green and blue swirls, it was hailed as a major turning point for the Fairtrade mark. Since then, some 650 million bars and bags of Fairtrade-certified Cadbury Dairy Milk have been sold in the UK and Ireland, and the chocolate manufacturer has been responsible for quadrupling the volume of Fairtrade cocoa exported from Ghana. (from Forum for the Future, Fairtrade gets a boost from Cadbury Dairy Milk, 2012)

It’s a clash of ethics to potentially blow the whistle on an operation which is benefiting so many people; the ethics of utilitarianism (what is best for the most people) and the ethics of virtue (that which is the highest good) to be precise. But as an impartial journalist, I’m here to tell you the truth.

“I can’t go on record”, my source said. “I still care about Fairtrade. I want to believe in Fairtrade and I still think they do good work. But their integrity has been compromised by Cadbury and I think people should at least know.”

Before Cadbury, Fairtrade cocoa ingredients were completely traceable. It meant that you could know the person who farmed it was getting the Fairtrade price and premium [the social premium is a fund for the community].

But when Cadbury came along with their rather capacious wallets, what they wanted was to make their biggest seller – Dairy Milk – Fairtrade. In the report, they said, ‘We get all our cocoa from the same place and we can’t make everything Fairtrade because it would cost too much. And we can’t tell you which bit of the cocoa is Fairtrade and which isn’t because it ends up in the same melting pot.’

So Fairtrade put their heads together and came up with a solution. They asked Cadbury to pay a premium on 20 % of their cocoa, because 20 % of the cocoa bought by Cadbury goes into Dairy Milk. But this means that since all Cadbury’s cocoa goes to the same place, one cannot guarantee that the cocoa in that Dairy Milk bar is Fairtrade because its mixed with the 80 % non Fairtrade cocoa.

But does it matter? Why is this 80-20 split important?

  1. Because Cadbury will make a far bigger profit by certifying Dairy Milk Fairtrade than it would be certifying any other of its brands Fairtrade;
  2. They get this certification without implementing any measures to embody the standards and principles of Fairtrade – transparency and traceability.
  3. They disproportionately represent themselves as Fairtrade by putting it on Dairy Milk which is their biggest seller (more than 20 % of their sales) when 80 % of their cocoa is still sourced from non-fairtrade (where slavery, child labor, torture and abuse are commonplace)

The result of their alliance?

In 2011, sales of the familiar purple bars reached a record 16% market share, and well over two thirds of customers surveyed claimed that the Fairtrade stamp was important or extremely important in their purchasing decision.

That’s not really fair now, is it.

Data and quotes from: Forum for the Future, Fairtrade gets a boost from Cadbury Dairy Milk, 2012

This article was originally published by Inspired Economist