Europe: Consumers Open Pocketbooks for Fair-Trade Products

By Peter Dhondt

BRUSSELS, Feb. 22, 2006 (IPS/GIN) — Fair-trade products like coffee, bananas and flowers have begun to sell well in Europe.

“Perspectives are positive,” Anja Osterhaus of the Fair Trade Advocacy Office in Brussels, a common initiative of four international fair trade federations, told IPS. “Growth is particularly fast in countries where fair trade is not well established yet and still has a big potential.”

The idea behind fair trade is to link low-income producers in developing countries with consumer markets. Fairly traded products seek to support living wages and safe and healthy conditions for workers.

Since 2000, the retail value of all fair-trade products sold in Europe has increased by 154 percent — an average growth of 20 percent a year.

In 2004 more than 660 million euros ($786 million) worth of fair trade products were sold in 25 European countries. Market shares are highest in Switzerland and Britain, shows a study released this week.

A fifth of all ground coffee sold in Britain in 2004 carried a fair trade label, a guarantee that producers received fair price for their beans. In Switzerland almost half of all bananas and 28 percent of flowers that went over the counter were fair trade.

In other European countries, market share for traditional fair- trade products like coffee, bananas and honey hovers between 1 percent and 5 percent — still considerable amounts. Belgian and Dutch consumers, with market shares of 4 percent and 3 percent, together ate 6 million kilograms of fair-trade bananas.

Britain is the fastest-growing fair trade market, says the study “Fair Trade in Europe 2005″ commissioned by the four international fair trade federations, Fairtrade Labeling Organizations, (FLO), International Fair Trade Association (IFAT), Network of European World Shops (NEWS!) and the European Fair Trade Association (EFTA).

Fair trade is still underdeveloped in the new member states of the European Union and in Spain, Portugal and Greece. “In countries like Germany, where the free-trade movement is active much longer yet, growth is slower,” says Osterhaus. “And in the Netherlands, a pioneer of fair trade, we might even witness stagnation.”

Fair trade could become a victim of its own success, she says.

“Companies see that the market for products with an added ethical value is expanding and are becoming active in that field as well. Our coffee now has to compete with brands that carry the Utz Kapeh label, whereas Chiquita bananas are now being sold under a label of Rainforest Alliance.”

Utz Kapeh is a worldwide certification program that assures social and environmental quality in coffee production. Chiquita bananas come from Chiquita Brands International, an international marketer and distributor. The Rainforest Alliance seeks to protect ecosystems and the people and wildlife that depend on them by promoting fair business practices and responsible consumer behavior.

But neither Utz Kapeh nor the Rainforest Alliance guarantees a minimum price for producers independent of market developments. “Consumers have a hard time to see the difference,” says Osterhaus.

The fair-trade movement in Europe aims to invest more in information on fair trade and in increasing its presence in the market.

Fair-trade products are now available from nearly 79,000 points of sale throughout Europe. Apart from 2,850 stores that exclusively sell fair-trade products and can count on 100,000 volunteers, fair- trade labeled products have found their way to the shelves of 55,000 supermarkets.

“We also work on product improvement, and we keep labeling new products,” says Osterhaus. Flowers and cotton are two strong newcomers.

Public authorities are becoming believers in the ideals of fair trade. The European Parliament serves fair-trade coffee to all its employees and visitors. In Britain, institutions using fair-trade products include the House of Commons, several government departments and the regional parliaments of Wales and Scotland.

In all, 140 British towns and city administrations are committed to using fair-trade products. More than 1,700 churches have declared themselves “fair trade churches.”

Europe leads with an estimated 60 percent to 70 percent of global sales. But sales are picking up in the United States and Canada.

Distribution of labeled products has also begun in Mexico, Brazil and South Africa. And fair-trade producers from poor countries like Ecuador and Vietnam sell some of their goods at home.

“This is only the beginning,” says Osterhaus. “The aim is to change all of world trade.”