Fairtrade Foundation
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| Charitable organization | |
| Founded | 1992 |
| Headquarters | London, England, UK |
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Key people
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Mike Gidney, Chief Executive |
| Website | www.fairtrade.org.uk |
The Fairtrade Foundation is a charity based in the United Kingdom that works to empower disadvantaged producers in developing countries by tackling injustice in conventional trade, in particular by promoting and licensing the Fairtrade Mark, a guarantee that products retailed in the UK have been produced in accordance with internationally agreed Fairtrade standards. The Foundation is the British member of FLO International, which unites FLO-CERT, 25 National Fairtrade Organisations and 3 Producer Networks across Europe, Asia, Latin America, North America, Africa, Australia and New Zealand.
The organisation is an independent non-profit organisation that licenses use of the Fairtrade Mark on products in the UK in accordance with internationally agreed Fairtrade standards.
Its four key areas of activity include:
The marketing system for Fairtrade and non-Fairtrade coffee is identical in the consuming countries, using mostly the same importing, packing, distributing and retailing firms. Some independent brands operate a virtual company, paying importers, packers and distributors and advertising agencies to handle their brand, for cost reasons. In the producing country Fairtrade is marketed only by Fairtrade cooperatives, while other coffee is marketed by Fairtrade cooperatives (as uncertified coffee), by other cooperatives and by ordinary traders.
This mode of operation has led to criticism of the foundation. It is argued that, because retailers and cafes in the rich countries can sell Fairtrade coffee at any price they like, nearly all the extra price paid by consumers, 82% to 99%, is kept in the rich countries as increased profit. There is evidence that dishonest importers do not pay the full Fairtrade price, so an even smaller proportion reaches the Third World.
Cooperative traders and exporters can sell coffee as Fairtrade certified if they meet the political standards of FLO and they pay them a certification and inspection fee. Other administration costs and production costs are incurred to meet these standards. The exporter (not the farmer) is paid a minimum price for Fairtrade certified coffee when the world market is oversupplied, and a Fairtrade premium of 15c per lb at other times. The cooperatives can, on average, sell only a third of their output as Fairtrade, because of lack of demand, and sell the rest at world prices. As the additional costs are incurred on all production, not just that sold as Fairtrade, cooperatives sometimes lose money on their Fairtrade membership. After the additional costs have been subtracted from the Fairtrade price, the rest goes on ‘Social Projects’ such as clinics, women’s groups and baseball pitches.
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