FAIR TRADE LABELS - ANSWERS FOR BUSINESS

Fair TradeMark Canada, a membership based federal non-profit company, not a charity, promotes fairness in trade nationally and internationally by:

• Promoting a mark which certifies fairness in trade;
• Licensing a label for products which meet international criteria, for sale by Canadian companies;
• Educating the public, retailers and government about fair trade benefits;
• Working with international movements in research and policy advocacy.

Modeled after eco-logos and European fair trademarks, Fair TradeMark Canada licenses a label for use on products and brands bought and sold with a concern for justice for southern producers. Standards monitored by an independent international network include not only a fair price, but also long-term assured markets, provision of credit at reasonable rates, and purchases from registries of democratically organized producers.

Fair TradeMark Canada is the Canadian affiliate of a fair trade label organization which licensed the sale of 24 million pounds of coffee beans sold through 130 European brand names in more than 35,000 supermarkets last year. Other products covered by this label are tea, cocoa, sugar and honey. Products whose feasibility for labeling is being investigated include orange juice, bananas, coconut oil, sesame seeds, flowers, textiles and soccer balls.

Our membership base includes major Canadian churches, trade unions and non-governmental organizations (NGOs). Their networks are organizing to promote the label and reward companies which sell coffee under fair trade conditions. They are carrying out consumer surveys, planning ads in local newspapers, lobbying supermarket managers and generally laying the groundwork to help companies demonstrate corporate responsibility in their relations with coffee farmers.

Our objectives:

• To convince the Canadian coffee industry that there are enough consumers interested in fair trade to justify the following corporate actions:
  • selling a portion of their coffee under fair trade conditions
  • using the independent fair trade label to tell customers that they have done so.
    (Note: 9 Canadian coffee companies have signed licence agreements and are now selling fairly traded coffee)
    
    
• To create business partnerships between small farmers, manufacturers, distributors and consumers in which everyone gains.
  
  
• To develop this label which allows consumers to reward those companies which purchase a portion of their coffee under our internationally monitored fair trade conditions.
  
  
• To organize a "buycott, not a boycott" ©, providing a positive alternative for consumers who care.

Europeans Gain Market Share

- European success
- over 130 brands in 35,000 supermarkets
- 24 million pound of green bean sales licensed in 1997
- Fair trade coffee is served in:
- the European Parliament and 6 national legislatures (UK, Holland, Germany, Italy, Denmark, Ireland)
- Numerous state legislatures, City Councils, corporate and university canteens

Five percent of consumers are willing to pay more, provided that:

- there is no compromise in quality
- the product is easily available
- there is an independent monitoring/guarantee of claims

TESTIMONIALS

- Hamburg Coffee Company, coffee importers, Germany

"While initial efforts were required to convince roasters that the fair trade label was a good thing, we now find that the coffee is good Value for the money, is of high quality and involves a low risk. TransFair Germany has proved to be a good business partner in generating public relations for our clients' coffees."

[Interview with FTMC, Hamburg, April 1, 1996]

- H. Neuteboom B.V., coffee roasters, Netherlands

"Because of our success on the Dutch market, other coffee roasting houses have joined in, and the system is successfully spreading all over Europe."

[Letter to FTMC of February 12, 1996]

- Safeway, UK

"Cafedirect [licensed by the UK Fairtrade Foundation] is doing a very good selling job for fair trade and a very good selling job for Safeway. I look forward to seeing Tea Direct and other products with a fair trade component.

(Excerpted from TWIN Trading's Rough Guide for Business)
[Andrew Cole, Buyer at Safeway Plc.]

From the British press

• A brave move, but also smart. "Ethical" products are clearly bursting out of their niche... SuperMarketing
• Fair deal for the Third World is catching on... Independent
• Shoppers shell out for products of fair trade... Sunday Express
• Consumers bring ethics to trade... Importing Today
• Worth a Bean... Sainsbury Magazine

(Excerpted from TWIN Trading's Rough Guide for Business)

WHO ARE WE?

• Fair TradeMark Canada is a membership based non-profit company, not a charity, promoting fair trade, nationally and internationally.
• Canadian affiliate and "franchise" of Fairtrade Labeling Organization International (FLO);
• Membership: the United Church of Canada, the Canadian Catholic Organization for Development and Peace, Canadian Autoworkers Social Justice Fund, Steelworkers Humanity Fund, CUSO, World Vision Canada, Inter-Pares, Horizons of Friendship, Oxfam-Canada, Christian Reformed World Relief.
• Board of Directors with fair trade coffee sales experience; Managing Director with 25 years of experience in international development and Canadian social justice networks and has been a Member of the TransFair International Executive Board.
  
  
• Fairtrade Labeling Organization International (FLO)
  • A federation of national initiatives with the same shared standards and monitoring: Netherlands, Switzerland, Denmark, Belgium, France, Germany, Austria, Italy, Luxembourg, Japan, Canada, Sweden, Ireland, Norway, Finland, the U.K. & the USA.
  • A tested legal and promotional framework for multiple products in distinct national markets
  • Independent, international certification of standards and compliance with fair trade conditions for coffee, tea, cocoa, sugar and honey

HOW DOES THE FAIR TRADE LABEL WORK?

• Like the Woolmark or an eco-logo, fair trade labels are recognized by consumers as certifying product qualities and the integrity of claims
• A membership base of churches, unions, business and non-profit organizations and a professional staff use standard criteria and procedures to ensure independent certification.
• International monitoring
• Producer information database
• Annual visits to registered groups
• Coffee contract/transaction database & compliance monitoring
• Convenient, ready made operational framework
• Standard criteria
• Licensed importers/brokers
• Licensed roasters/packagers/retailers
• Monitored producer register and agreements

WHO ARE THE PRODUCERS?

• Producers/suppliers are inscribed in the FLO Fair Trade Coffee Producers Register ICR) shared by the TransFair, Max Havelaar and Fairtrade Foundation fair trade marketing initiatives.
• Approximately 340 service co-operatives or democratic organizations representing 500,000 small producers in 17 countries (mainly family farms not dependent on hired labour)
• Total production capacity 250,000 metric tonnes of green beans per annum
• Every type of coffee is available (quality grades, arabicas, robustas)
• The Register is open and new suppliers can be registered by the ICR if they meet the criteria.

BENEFITS FOR LICENSEES

• Access to a broad Canadian promotional network.
• Significant media coverage
• Church, trade union, consumer, NGO recognition of a positive alternative model (Buycott, not boycott)
• A ready made, easily measured marketing tool

RESPONSIBILITIES OF LICENSEES

• Meet the four principal fair trade criteria of the International Coffee Register:
  1. Purchase from the FLO Coffee Register of democratically organized small producers through a licensed fair trade importer;
  2. Long term purchasing (more than one crop cycle by letter of intent);
  3. Advance payments/credit at commercial/negotiated rates, if requested;
  4. Price (Min. US$1.26/lb green beans FOB for washed arabicas or US$0.05/lb over world price if higher.)
• Display the TransFair logo/trademark per the license agreement
• Pay a 13¢/lb licence fee per the licence agreement

[Transfair Canada] [Who We Are]

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