Does the ‘fairness’ of Fairtrade coffee matter?

According to The Weekend Australian, regular commenter Sinclair Davidson and Tim Wilson of the Institute of Public Affairs are going to the Australian Competition and Consumer Commission, alleging that Oxfam has engaged in misleading or deceptive conduct over its Fairtrade coffee. According to Oxfam:

The term Fairtrade refers to an independently audited product certification and labelling system that ensures those who grow and produce coffee get a fair go. It does this by:

Paying farmers and workers a fair price for their work
Helping them gain skills and knowledge to develop their businesses in the global economy
Providing a certification and labelling system to ensure Fairtrade standards are met and that the benefits of Fairtrade get back to the farmer who produced the product

But according to Tim, drawing in part on this Cato article:

there was evidence that Fairtrade products could do more harm than good for coffee producers in undeveloped nations. He cited reports alleging producers had been charged thousands of dollars to become certified Fairtrade providers and some labourers received as little as $3 a day.

I know nothing about how much Fairtrade affects coffee producers, but if we were to be a little cynical about Fairtrade consumers it perhaps doesn’t matter much whether it is good for producers or not. As I have long argued (eg here and here) there is a market for political gestures, and how effective the gesture is likely to be doesn’t seem to be a huge part of the calculation.

Business has seen the opportunity. In Tim Harford’s The Undercover Economist, in an interesting chapter on the retail coffee market, he notes how a UK coffee chain was able to price discriminate by offering Fairtrade coffee – it was a useful way of identifying those customers prepared to pay more than the standard price because they could add altruistic feeling to the sugar and milk in their coffee. I’m not sure whether local cafes price discriminate or not with Fairtrade coffee, but even if not it is still for them presumably a useful branding exercise to attract customers who want to appear to have a ‘social conscience’.

If Fairtrade is really selling a benefit to the coffee drinker rather than the coffee producer, it is perhaps no more deceptive than the other branding exercises designed to create image associations with particular products that have little to do with their intrinsic qualities or characteristics.


In other coffee news, the best item in yesterday’s Age was a brief report saying that Brunetti’s, the best cafe in Carlton, the place that puts the latte into latte leftism, is to stay. The threat that it may be forced to move or close by a landlord massively increasing the rent even made it to the ABC TV evening news, such is Brunetti’s status in inner Melbourne. Clearly the landlord had been stung badly by the negative publicity, as notices have appeared in Brunetti’s windows trying to salvage her reputation, as part of the deal finally struck by which Brunetti’s would stay where it is. I wonder how many thousands she knocked off her rental ask to try to get her reputation back?

113 thoughts on “Does the ‘fairness’ of Fairtrade coffee matter?

  1. In our complaint to the ACCC we make two substantive comments. One, we allege that Oxfam have engaged in misleading and deceptive conduct by claiming workers receive a fair price for their work, when some workers have been known to receive less than the minimum wage. (We also point to reports that fairtrade coffee has been planted in protected rainforest areas, in vilation of the Fairtrade standard). Second, we allege that the Fairtrade label requires that a fairtrade premium be charged to customers. This, we argue, constitutes retail price maintainence which is illegal under the Trade Practices Act. We also argue that the notion itself does not assist farmers in poor economies – that, however, is not necessarily unlawful. This is a value-laden argument that I suspect the ACCC will not want to enter.

    We believe this goes beyond a branding exercise (this is a coffee cartel and not a single company selling its own product) and while I agree that there is a market for political gestures, I suspect this one is sailing too close to the wind (if not actually unlawful, as we allege).


  2. “I know nothing about how much Fairtrade affects coffee producers …. presumably a useful branding exercise to attract customers who want to appear to have a ’social conscience’”
    What a mean thing to say. Who would you be performing to – the checkout person at Coles? I buy fairtrade coffee because presumably it benefits the growers, who are poor – that’s all.

    A while back I mentioned the packet of cashews I bought at DJs labelled Product of Australia – I’m fairly sure those cashews come from Vietnam. It’s just typical of the misleading labelling on nearly every product in the supermarket, so why isn’t Sinclair complaining about that?

    What a pity I didn’t walk down Faraday St in my first visit to Carlton, earlier this year. I traipsed down the disappointing and vulgar Lygon St , but was pleased to find a shop there called Koko Black which served a very nice iced chocolate. Recommended.


  3. Sinclair’s point is quite correct – there is a big difference between misleading and deceptive conduct and branding based on a political gesture.

    Those who sell organic food and claim the food is more healthy must be similarly held to account. It is a lie, just as it is a lie that the Fairtrade Coffee program pays higher prices to growers.


  4. Sinclair – I only just saw your comment. As someone who has always bought the coffee I never thought it meant they were paid a ‘fair’ price (what would that mean?) – just a better price than they would have otherwise. I also didn’t expect the Fairtrade people to pay whatever these “minimum wages” are – I just expected the people producing the coffee would get some extra money from we who bought it.

    Can you explain this bit: “we allege that the Fairtrade label requires that a fairtrade premium be charged to customers. This, we argue, constitutes retail price maintainence” – the consumers are prepared to pay more in order to give the producers more money – there’s plenty of other coffee in the market.


  5. David – I think if the organic stuff (fresh fruit and vegetables) is good quality and fresh it probably is slightly healthier. But I also buy it as much for the way the land is treated – usually organic growers are constantly building up soil fertility, which I think is an improvement on the more commercial practices.


  6. “What a pity I didn’t walk down Faraday St in my first visit to Carlton, earlier this year. I traipsed down the disappointing and vulgar Lygon St”

    Indeed, Lygon St between the city and Grattan St is just a tourist trap, and even ‘my’ part of Lygon St, from the University Cafe to Elgin St, is generally mediocre for food. But the coffee is good.


  7. Russell

    There is no evidence that organic farming per se is better tasting, is better for the environment, for land quality or for consumer’s health. Indeed, misleading advertising by the organics movement has been stamped upon in the UK by the Advertising Standards Authority and by the Food Standards Agency. What claims they can actually make are pretty limited.

    Quite apart from Sinclair’s misleading advertising issue – my main difficulties with fair trade are that: it is economically inefficient (by blunting price signals to farmers who would otherwise be encouraged to move to alternative products); ineffective (by forcing producers to select certain production techniques – such as cooperative production, supposedly more sustainable production techniques); and unfair (membership fees are high while a significant amount of the fees go to the promotional activities of the Fairtrade accreditation organisations; why should an employee in a company or country not so lucky to be included within the label be treated differently from a worker who happens to be- what’s so special about a South American cooperative labourer compared to a Vietnamese coffee worker on a new efficient coffee plantation?)

    If people want to buy organic or fair trade good luck to them. But they would be deluded in thinking they are pursuing healthier, better tasting, greener, or even fairer.


  8. “But the coffee is good.” – good? not if it’s not Fair Trade.

    and another thing – I was led to believe that Perth would be as cosmopolitan as Melbourne and Sydney if only we had retail trading on Sundays. Only to find lots and lots of closed shops in Melbourne on Sundays – even places mentioned on tourist maps!. According to the map I was supposed to have a sandwich or something in some old cafe in the Block Arcade – closed. (Luckily in some other arcade across the street was another Koko Black, so another nourishing iced chocolate was consumed.)


  9. Procrustes – that’s unfair, because I’m too lazy to find the evidence that organic farming is better for the land. But it is – a more sustainable way of producing food too – aren’t artificial fertilizers made from oil somehow?

    Re FairTrade – yes I can see the problem in propping up some coffee producer in Timor if producers in Vietnam are producing coffee much, much cheaper. But I’m happy to pay more for the Timor coffee in the hope that the producers lives there will be maintained while they move to some other crop. Or, if they can’t produce anything cheaper than elsewhere, I’d be happy to just go on paying more for their coffee.


  10. Russell

    Let me begin by addressing an argument on your own terms. Bizarrely, organic farming is allowed to use copper based fungicides – isn’t copper a non-renewable resource too? My gosh, what will they do when the copper runs out?

    In any case, the sustainability argument is just nonsensical – new technology will replace the current fertilisers before we ever run out of oil.

    Moreover, organic farming is hardly sustainable – if all food production had to switch to organic methods the amount of land needed to feed the world’s population would require massive conversion of forest land to agriculture – do you think that is that a good bargain in sustainability terms?

    The only evidence I am of about organic farms being better for land use relates to management practices that have nothing to do with whether the farm is “organic” (in terms of pesticide and fertiliser use). So a farm that used the integrated farm management practices as well as pesticides and non-organic fertilisers would have the same outcomes as purely organic farm (and be just as expensive as organic) (see “The March of Unreason” by Dick Taverne)

    If the warm inner glow is what you’re after, you could make yourself even happier in your support for Timorese farmers by donating the price difference between an organic coffee and a non-organic coffee brand to an effective aid organisation. Particularly one that did not cream off most of the takings for its own ends.

    There is evidence that the retailers use “fair trade” labelling to market segment – ie to identify less price sensitive buyers so they can skim consumer surplus off them (see Tim Harford, referred to above).

    There is also evidence that the Fair trade organisations spend as much as half the fees they collect on their promotional activities (see Institute of Economic Affairs “Half A Cheer for Fair Trade”). After all these rents and overheads, there wouldn’t be much left to actually distribute to those you are intending to help.

    As you have already recognised, fair trade blunts the price signals to those Timorese farmers. The problem of low coffee prices is too much coffee but you want the Timorese farmers to stay in the game.


  11. This strikes me as nothing more than a cheap and sleazy publicity stunt on the part of the IPA and its supporters. After all, according to the weekend Australian article cited in Andrew’s post:

    Begin quote.

    “In order to lodge the complaint, Mr Wilson purchased a 250g pack of Fairtrade organic decaf ground coffee from the online Oxfam shop.

    “We purchased this product in good faith, with the aim of lifting people out of poverty while enjoying our favourite brew,” Mr Wilson said, in his letter to ACCC chairman Graeme Samuel.

    Mr Wilson and Professor Davidson have long held doubts about whether Fairtrade products help coffee, tea and cocoa producers in undeveloped nations. Sales of such products in Australia total about $8million.”

    End quote.

    How can one of the two people involved in making the complaint purchase an item in good faith in order to make a complaint? How can one of the two people involved in making the complaint purchase an item in good faith when they have long held doubts about the product?


  12. I should note that the article in the Weekend Australian that I quoted from in my earlier comment (number 11 on this thread) was written by Caroline Overington.


  13. Damien

    Whether it is cheap and sleazy is neither here no there – fair trade is an irrational con job in terms of equity, efficiency and effectiveness.

    I say good luck to them.


  14. Damien, in order to lodge a complaint you have to have been aggrieved – it’s called ‘standing’. That is why we have bought the coffee. The article spoke a lot about Fairtrade coffee and the more general issues. We have made specific allegations that relate to specific sections of the TPA that we believe to be in breech.


  15. Russell — organic farming is worse for the environment, because the yields are not as high. Hence you use more land. Thus, if you buy organic coffee (or other organic products for that matter), then you are responsible for more land destruction than otherwise would be the case. No doubt thats an orthogonal issue to “Fair Trade” although buyers often seem to correlate them in their heads.


  16. Sinclair and Tim, interesting, although I can’t help thinking if there are better uses for your time.

    For once, I second something Russell said – can you clarify what you mean when you say that use of the Fairtrade lable requires customers to pay a premium? Is this part of the agreement? If so, against what brand/type of coffee is the premium to be assessed? It doesn’t seem to make any sense.

    Also, Procrustes, I’m not sure I agree that Fairtrade is inefficient per se. Misleading conduct is one thing, but if resources are used to produce a product that satisfies consumer wants, then it is efficient, even if the same resources could be employed making more of something else or more of the same thing in a different way (eg by not using cooperatives).


  17. Andrew Norton wrote:
    As I have long argued (eg here and here) there is a market for political gestures, and how effective the gesture is likely to be doesn’t seem to be a huge part of the calculation.
    Not only for people on the left though. While Fair trade coffee might be a scam (and it wouldn’t surprise me, given the retail outlets it turns up in), the biggest fraud in political gesturing has always been “family friendly” – something the right need to start stamping out. I wonder whether the ACCC can start regulating the names of political parties where they represent clear breaches of advertising codes?


  18. I don’t think Andrew’s point is necessarily about ‘performing’ for anyone Russell… it’s about the warm inner glow of knowing you are a noble and compassionate person, concerned for others and prepared to pay extra money because of that compassion/concern.

    People who believe in ‘fair trade’ are not, in general, terribly concerned about logic or facts, so I don’t imagine Sinclair’s case will have any effect on the utility they gain from buying the stuff. It is an amusing stunt though.


  19. I have no problem with fair trade as a concept that is voluntary. If people want to throw their money away without adding much to development so be it.

    The problem is that I do not see it as a sustainable mechanism for development. If you rig the rules in favour of a select few you can always provide evidence that the system works. It is the people who are locked out that I am concerned about.

    I am also concerned about the ‘voluntary’ nature of these sorts of standards. They start voluntary, and then are adopted by industries due to heavying from NGOs. NGOs then go to Government and point out industries are adopting them and they are the good basis for regulation. If you need evidence for this, look at timber standards.

    And on top of all this, we all know that only free trade provides a sustainable mechanism for lifting people out of poverty.


  20. My bad, resale price maintainenece, not retail price maintainence. From our letter,

    Oxfam has a responsibility not to engage in resale price maintenance. Yet this is precisely what they have been engaged in through FLO certification. As part of certification as a fair trade product prices are set by FLO under Section 4.0 of the “Fairtrade Standards for Coffee for Small Farmer’s Organizations” it actually lists schedules and fixed prices that must be used and then passed on to the consumer.


  21. Those of us who have a deeper interest in coffee would look at Fair Trade coffee from several perspectives. First, any action to channel additional funds to growers should be supported, but I am not convinced that Fair Trade is the only way this can be done. Second, Fair Trade does not specifically guarantee quality, it can contribute to quality in the long term but many coffee consumers have been disappointed by the quality of many Fair Trade coffees.

    I would like to see a greater encouragement of ‘fairly traded’ coffees like we are starting to see among artisan roasters in Australia where they rely on a relationship with the grower and are able to deliver in terms of quality and return to the grower a much better income than is possible through the fair trade system.

    I think the Davidson/Wilson action is silly at some levels, but it is useful in illuminating the deficiencies of the Fair Trade system

    Oh and Procrustes, you stated that there is “no evidence that organic farming per se is better tasting, is better for the environment, for land quality or for consumer’s health”

    That is a sweeping statement with the potential to encompass all manner of errors.


  22. Leopold – Andrew did write “customers who want to appear to have a ’social conscience’.” – not “customers who want to feel they have a superior social conscience”, so I guess he did mean ‘performing’.

    I don’t think buying fairtrade products would make anyone feel noble or compassionate (its a few cents after all!) – you make the decision once to buy fairtrade and never think about it again – it’s just shopping. Like having donations to charity deducted from your paypacket – it’s the least and easiest way to do some small thing, but hardly noble since you’re not even aware of it – it makes no difference to you.
    I read the trash from the Cato Institute and read this “It is true that the Fair Trade coffee system … has improved living standards for many participating coffee growers” – and this – “participation in Fair Trade networks has undoubtedly generated benefits for many producers.” So it seems I got what I wanted from buying the coffee.

    Organic – I’m not a purist, if soil is lacking something then add it. But the best and most sustainable way to produce food is in a mixed operation where manure from humanely raised animals – chickens, goats etc – is used to enrich the soil, green crops are grown and turned in, mixed cropping rather than monocultures, using the least toxic pesticides etc will result in increasing soil fertility naturally – and plants grown in humus rich soils need less water. This type of food production will be more labour intensive and expensive, but it’s the best way to do it, and we can afford it.


  23. Russell, you need to decorrelate what you think are the best methods of farming and “natural” methods. We need the highest yielding crops that don’t destroy the enivornment. If that means lumping piles of artificial nitrogen on the soil in places, then thats better than not lumping nitrogen on in twice as many places. There was a good discussion on this a few years ago in Nature if I remember correctly.


  24. Conrad – you remind me of the lastest furore in WA when the health minister suggested that too many women were going for caesareans rather than natural births. Apparently convenience is much more important than ‘natural’ these days.
    We need sustainable and healthy food produced by sustainable and healthy communities. There are market gardens near me – the land is just acres and acres of exposed sand. The sprinklers never stop going, the plants are drenched in artificial fertilizers and pesticides (if you’ve seen strawberries grown commercially you might never eat one again). It isn’t really sustainable and it isn’t healthy.


  25. Surely warm inner glow and public display are possible consumer benefits, with different coffee drinkers gaining one or both.


  26. Hard to believe it could be more than a luke-warm glow, and have you ever noticed anyone indulging in such a ‘public display’ of buying fairtrade coffee? How did they do it?


  27. Andrew you could suggest to them that inside the package would be a “I buy Fair trade” sticker that you could stick on your lapel – like when you give to charities rattling a tin on a corner.


  28. Presumably we could imagine a simpler labelling system than ‘Fairtrade’: you could just have a sign at the front of the supermarket telling shoppers ‘If you want to help the poor, buy anything that doesn’t have a Made in Australia label on it’.

    Following that rule of thumb would help lower world inequality, since I’m pretty sure there’s hardly anything in the typical supermarket that comes from a country with a higher GDP than Australia.


  29. Following that rule of thumb would help lower world inequality, since I’m pretty sure there’s hardly anything in the typical supermarket that comes from a country with a higher GDP than Australia.
    Beneficial side effect: Dick Smith’s head would explode. It’s a win-win situation.


  30. Russell,

    I think you are misunderstanding me. I think we should be producing healthy food in a manner that is sustainable. However, there are trade-offs to be made. For example, if organic foods produce half the yield, and everybody wants to eat only that, then we need twice the land area to produce the same amount, or we all starve (or at least eat less) — this is even under the assumption that the land currently unused is equally as productive. Twice the land area means the destruction of huge amounts of the environment, if such land even exists. This simply isn’t a practicle solution in most countries of the world (especially where people already don’t get enough food), and nor does make environmental sense.

    No doubt there are a few crops out there that yield very similar amounts when produced organically (even if it takes more effort), or whose consumption is so small, land area doesn’t matter (perhaps this applies to cashew nuts), but that isn’t the case for rice, wheat, and all the other things that people have to eat.


  31. Very cunning Andrew, since it is we on the left who have many scruples who have to weigh up our desire to buy Australian made (as opposed to Australian ‘produced’ apparently) against helping the foreign poor by buying their goods, as against buying organic etc etc.

    I can only bear occasional visits to ‘the typical supermarket’ but nearly everything I buy there comes from countries with I imagine higher GDP than Australia’s: peanut butter from the USA (why did Sanitarium start using plastic containers? – plastic vs glass, more decisions), tamari (gluten free and salt reduced) from Japan, chocolate from Belgium or Switzerland (they have to be considered as just “The EU”) etc etc


  32. Conrad – what if the food, being properly produced, was more expensive, and therefore people wasted less. Huge, vast amounts of food are bought and thrown out – people should be more ‘economical’. Maybe we’re clearing too much, to produce too much, just to throw it away. Then there’s the issue of how much grain is fed to animals …..


  33. “Hard to believe it could be more than a luke-warm glow, and have you ever noticed anyone indulging in such a ‘public display’ of buying fairtrade coffee? How did they do it?”

    They go onto blogs and tell everyone “I buy fairtrade coffee because presumably it benefits the growers, who are poor”.

    Or they get all smug at dinner parties and say, when the coffee is brought out, probably with their eyes closed, “Actually, I only drink Fair Trade coffee. Is that Fair Trade coffee?” and they wear t-shirts that have printed in big letters “Make Trade Fair” and they express their disgust with people who don’t give to charity collectors/beggars with dirty looks and making “Tsk, tsk” sounds.

    The way I see it is that buying Fair Trade is another way of conforming to and gaining status in the Left-Wing sub-culture.


  34. Sinclair, how does the link you provided in comment number 20 on this thread have anything to do with resale price maintennance? It does noit appear to place any restrictions on the retail price of fairtrade coffee in destination countries. All it does is place restrictions on the price paid to producers of the coffee.


  35. James – until Andrew posted on this topic I’m certain that nobody knew I bought FairTrade coffee – why would anyone care – but as it was the topic, I responded as, probably, the only person in the discussion who did buy it. I’m finding it very hard to believe that anyone has ever flaunted their purchase of FairTrade goods before you or Andrew – have they? I suppose my friends and I are a ‘left-wing sub-culture’ but to think buying Fairtrade groceries would gain anyone status is just laughable. I honestly can’t remember ever hearing it discussed, at all.
    People who wear t-shirts with ‘Make Trade Fair’ on them are presumably campaigning on an issue (probably the whole globalisation thing) they think is important. Why would you think it was about status?


  36. By fixing a price that must be paid to a third party in return for a logo constitutes resale price maintaince under the TPA. The breech occurs, we allege, when the FLO specifies a price to be paid to farmers in return for the use of the Fairtrade logo. (This is a subtly different issue than the normal retail price maintainence economists think of).


  37. This strikes me as nothing more than a cheap and sleazy publicity stunt on the part of the IPA and its supporters.

    I’m a bit out, Damien, that you’re so dismissive of Tim and I performing our civic duty and reporting our suspicions of potentially unlawful behaviour to the authorities.


  38. Come off it Sinclair. If he is quoted correctly, Tim claims that he bought the coffee in good faith, fully expecting it to help coffee producers in developiung countries. However, apparently he also bought it because he needed to do so if he was to make a compaint. The two are inconsistent.

    According to Clarke and Corones (2005, p. 494):

    “In the TPA, resale price maintenance is defined so as to cover those forms of VPF [vertical price fixing] that occur when a supplier fixes, or attempts to fix, or refuses to supply because it has been unable to fix, the minimum sale price of the goods or services sold by its dealers.”

    The full definiotion of RPM under the TPA is contained in section 96(3). (See Clarke and Corones (1995, p. 508).)

    If you interpret the commodity to be free trade coffee, unless there is a provision in the sale contracts for Australian purchasers that prevents them from reselling the coffee at a price below some specified minimum, then RPM has not taken place. The link you provided did not suggest that such restrictions exist.

    If you interpret the commodity as being the free trade certification itself, then I suspect that an argument could be made that retailers who have that certification for some of their coffee can sell it to others at whatever price they see fit, so long as it applies only to the coffee beans that have been certified. As such, the certification will only be useful if it is applied to those coffee beans. This takes you back to the case in which the fair trade coffee is the commodity.

    So precisely how does fair trade coffee involve RPM under the TPA?


  39. The full reference for the book I mentioned in my previous comment on this thread (comment number 38) is:

    Clarke, P and SJ Corones (2005), Competition law and policy: Cases and materials (second edition), Oxford University Press, Hong Kong.


  40. If you read the Act, as opposed to a secondary source, you’ll find a deeming provision that covers Australian importers as if they had committed the original act. You’re concentrating too much on the ephemera and not enough on the alleged breeches of the Act. We have have made three allegations of breech. Our letter is fully referenced to the TPA and links to actions that we allege violate the TPA. It is now up to the appropriate authority to investigate any breech of the law and take appropriate action.


  41. Sinclair, why don’t you make the letter public? Just going by your comments, it is hard to see how the deeming feature has any relevance. You still have to answer the basic question of how the faitrade organisation breaches the RPM provisions. In what way does it restrict purchasers from subsequently selling the coffee (or some other product) at a price below some specified minimum? What precise product are you talking about? If you are talking about the logo itself, why does your argument apply to fairtrade coffee and not to other products that try to distinguish themselves through branding? Do trademarks violate the RPM provisions of the TPA?


  42. “Why would you think it was about status?”

    For the reasons already outlined on this thread, so-called “Fair Trade” doesn’t benefit improvished people.

    All I can think is that the people who buy this stuff, rather than engage in a critical analysis of the effects of their decision (which, admittedly, are marginal anyway), prefer just to buy it in ignorance, and in so doing signal to their Left-wing friends that they are thoroughly concerned, serious, compassionate, Left-wing Citizens of the World. Since they haven’t analysed it critically, they can tell themselves “presumably it benefits the growers”.


  43. The labelling organisation does not actually sell coffee, they sell labels. One of the conditions on selling the label is a price restriction, Tim and I believe that price restriction is unlawful constituting resale price maintanence under the TPA. Our allegation is not aginst the labelling organisation, but the Australian importer, who is deemed under the act to have done the deed. Now, if the ACCC believe us they will act against the importer and if they don’t they won’t act against the importer on that component of our allegation.

    This argument does not apply to organisations branding their own products with their own logos. I have no problem (as you realise) with organisations attempting to increase the value add of their product, or the perceptions of their products. If the logo required increased employee benefits and increased environmental standards only, it would not violate the TPA resale price maintanence provisions. Tim and I allege that the price floor aspect of the logo does violate the TPA.


  44. Sinclair, they are selling a certification service. In order to be certified, you need to pay producers more so that they can ensure farmers gert a higher price. The certification attaches to coffee that meets this crteria. If you like, you could view the certification as being able to be re-sold to other parties at any price, but those parties would be unable to use it for anything other than the certified coffeee.

    This is similar to a product endorsement. If company X hires person Y to endorse their product, is it resale price maintennance if they then cannot sell that endorsement to company Z for use with product W at any price?


  45. I don’t think your product endorsement analogy works. Now I might be wrong. Maybe the ACCC or the judge will believe your type of argument – time will tell.


  46. Interesting finding that Fair Trade actually does help imporve some people’s lives. A 2002 study by Loraine Ronchi of the Poverty Research Unit at Sussex University study “The Impact of Fair Trade on Producers and their Organisations: A case study with Coocafe in Costa Rica”, reviewed 10 years of Fair Trade development with Costa Rican coffee farmers.

    The study found that… “Fair Trade can be said to have accomplished its goal of improving the returns to small producers and positively affecting their quality of life and the health of the organisations that represent them locally, nationally and beyond.”

    Specifically the study found,

    The FLO model in use with Coocafé sets minimum standards: a floor price and premium for coffee and the requirement that purchases are made from democratically organised small producer organisations. We have seen that in the case of the Costa Rican consortium, some Fair Trade partners, the ATOs in particular, have gone far beyond these criteria in their provision of capacity building and support for Coocafé and its nine primary level co-operatives.

    …Although the primary co-operatives still rely on the price differential Fair Trade gives them over their competitors, especially in the current climate of coffee crisis, the consortium itself has furthered itself along the path of autonomy in terms of organisational strength. This is particularly true since the Fair Trade facilitated establishment of its export arm. The co-operatives, with the breathing space allowed them by the steady and oft-superior Fair Trade price, have been able to continue to operate efficiently during a period of crisis for co-operatives and private beneficios alike in the coffee sector. Furthermore, the benefits of belonging to a larger organisation under the common guise of access to Fair Trade markets has improved their leadership and impact on their producer members and the communities.


  47. “Now, if the ACCC believe us they will act against the importer and if they don’t they won’t act against the importer on that component of our allegation.”

    Or, Sinclair, they might conclude that your complaint is a stunt designed to make a political point: fair trade bad, free trade good.

    Why don’t you complain to them about free range eggs while you’re at it?


  48. I don’t know about free-range eggs. Please provide information about their allegedly unlawful practices directly to the ACCC.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s