When price is all that matters, can Lidl and Aldi afford to offer a wider choice of ethical products?

The Fairtrade Foundation’s Michael Gidney wants Lidl and Aldi to offer a wider choice of ethical products

JAMES ASHTON 

Sunday 22 February 2015

That’s not fair. Twenty years after its blue-and-green logo first appeared on British supermarket shelves, sales of Fairtrade goods have gone backwards for the first time.

In one respect, it’s not surprising. A price war and falling commodities costs meant the overall grocery market registered falls last year. Fairtrade, whose ethical brand is licensed to everything from coffee to clothing, pineapples to preserves, is too big not to be hit.

But there are other factors. The discounters Aldi and Lidl, which have won market share at the expense of Tesco and others, stock less of their goods that certify better working conditions and fair pricing for suppliers. So are shoppers losing their conscience in search of a bargain? Or is Fairtrade losing its way in a sea of other sustainability schemes? Michael Gidney, the chief executive of the Fairtrade Foundation, says it is neither.

He insists “there is interest” from the discounters to stock more Fairtrade goods but concedes: “Our main concern now is that current trends and the drive for ever-cheaper goods could start to undermine the volumes farmers and workers are able to sell on Fairtrade terms.” If prolonged, that means “real losses to hard-working families and communities in some of the poorest countries of the world”.

At the start of Fairtrade Fortnight, Gidney reported that the value of retail sales fell 3.7 per cent to £1.67bn last year and issued a clarion call to the discounters: “Both Aldi and Lidl already sell a limited range of Fairtrade products, but there is scope for them to increase that offer to give the public wider choice.”

Even if they don’t, Gidney cites the 9,000 community groups campaigning to raise awareness of Fairtrade around Britain as evidence of the strength of his movement. He also brings up a Department for Business, Innovation and Skills study that found half of the public did not trust supermarkets to trade ethically on their own.

“Twenty years on, we have seen real progress,” he says of the network of 1.5 million farmers and workers in more than 74 developing countries that Fairtrade connects with buyers. “Even 10 years ago it would have been unthinkable that ethics were such an important part of the dialogue around trade.”

The sales volume of two signature products, bananas and coffee, carried on rising last year, but tea and cocoa fell. More than 4,500 product lines are licensed to carry the Fairtrade mark, but Gidney would like to concentrate on fewer, better performers.

“I am more interested in driving deeper impact in a smaller range of products than just having a notch on the bedpost,” he says. Selling well is Fairtrade wine, an area where he says the Co-op has led the way, but quality and availability is still improving.

Gidney also singles out flowers, such as Kenyan roses, which might be the choice of men trying to prove their caring, sharing side to a loved one. In a similar vein, Fairtrade is marketing wedding rings using gold from small-scale miners.

Buyers who sign up to Fairtrade agree to pay producers a fair price for their goods as well as a premium – worth more than £20m annually from the UK – which can be used to pay for community projects such as improving the water supply or building a packing plant. Critics say that not enough of the premium ends up in the hands of workers.

Research last year from the School of Oriental and African Studies (Soas) suggested that workers at Fairtrade certified farms were paid less and suffered worse working conditions than those at non-Fairtrade farms. Gidney says that report focused on migrant workers, and while Fairtrade supports better employment laws, minimum wages and greater union involvement, “we are not going to be able to solve that kind of thing on our own”.

He’s not what you expect. With his chunky cufflinks, smart suit and thick-framed specs, Gidney, 49, could be the local bank manager. Or maybe his khakis are in the wash after returning from a trip to Jamaica a few days earlier to visit sugar farmers. From 2017, the European Union will remove its cap on sugar beet production, which means that more expensive sugar cane producers will lose out. At the same time, the global sugar price has slumped, threatening disaster for many small producers.

“It is just not okay. You can equivocate and give a rational economic argument why preferences to African, Caribbean and Pacific countries should be stopped but it is not okay to do it in such peremptory fashion,” he says. “Actually, the sugar smallholders don’t know – they are not aware they will not be able to sell into the EU.”

The uphill battle to prevent retailers from squeezing suppliers is not something limited to developing markets. It is the reason the supermarket ombudsman recently launched an investigation into the trading practices of Tesco.

“I see it with small-scale producers in the east of England just as much as with a Zambian nut farmer or Caribbean banana farmer. If your market access is dependent on a very small number of buying desks in the UK it is the behaviour of those buyers that makes or breaks your ability to trade.”

Curiosity first took Gidney to Africa, aged 22, as a teacher. It was 1988, three years after Live Aid, and he suspected that the dominant narrative – that famine-ridden Africa was a basket case or at least a charity case – “didn’t quite stack up”.

“What stuck with me [when he got there] wasn’t so much the poverty as the entrepreneurship. The market sellers would be holding up live rabbits as the cars drove past, panel beaters were making things you might need out of scrap metal.”

He worked closely with children’s charities in Kenya and remembers clearly one children’s home where kids were “piled high in bunks” and the woman who ran it had a smallholding with cows and chickens to make ends meet so that she never turned a child away.

He views with suspicion the ongoing trade talks between the EU and United States that are designed to cut tariffs and regulation to boost trade in both directions. He fears that Africa will lose out.

“The energy that goes into trade talks is still very much around the self-interest of the big trading groups,” he says. Gidney saw that at first-hand when he was policy director at Traidcraft, another fair-trade organisation. Initially a trustee, he joined the staff of the Fairtrade Foundation as deputy chief executive in 2009 and was made chief executive in 2012 when his predecessor, Harriet Lamb, stepped up to run the international umbrella organisation. He admits that Fairtrade will change.

“If you invented Fairtrade now, you wouldn’t invent it in the same way. The landscape is different, more companies are doing different things, there are more attempts at sustainability. It started as a one-size-fits-all approach, where you had to do it in a certain way to get our mark on your product. The next phase is going to be much more about differentiation.”

His best example of that is a new partnership with Waitrose which will see Fairtrade verify the retailer’s own work in trying to build a sustainable supply chain in markets such as South Africa. And, to boost volumes, companies will be able to source some commodities on Fairtrade terms as an alternative to certifying the finished product, such as the cocoa from Cote d’Ivoire that goes into Mars Bars.

“Public interest has never been higher,” he says of his cause. Despite those sales figures, “this is only going one way”.