Labelling a Threat to Fair Trade

I think another really confusing thing is the fact that, unlike Fairtrade, Rainforest labelled products don’t actually have to contain 100% Rainforest certified goods.

As to where to go from here, I think that’s a really big challenge.

would these multiple labels ever meet in the same room together to discuss the way forward?

It appears a race to the bottom (of the ethical ladder) is going on and what we do to stop this requires public action and demonstration against it.

I think you should make it clear that the piece quoted is not from the research by Konstantinos Ioannidis. It is from an article by Justin Trauben of the Organic Consumers Association.
I don’t think his mud slinging approach is helpful to serious debate. I’m sure it’s possible to find bad things to say about Fairtrade certified businesses too.

Thanks for raising this emerging challenge to the credibility of Fair Trade Labelling.

I would be interested to hear more about the of the research of Konstantinos Ioannidis that suggests that competing ethical certifications confuse the consumer and leads to the devaluation of all marks involved.

I would be particularly interested to understand more about how he arrived at these findings and how consumers’ perceptions of “mark” value or credibility were assessed?

Over the last years many authors have noted the confusion of contemporary consumers. Especially in ethical purchases, consumers frequently appear to be more frustrated and confused than sophisticated and sometimes they appear to be uncertain about their final decisions (eg. Titus and Bradford, 1996; Carrigan and Attalla, 2001).

The proliferation of fairtrade and CSR schemes could suppress the sophistication of consumers. As European Commission noted in a recent communication on Fair Trade (2009), “the multiplicity of these schemes can carry risks of consumer confusion”. According to Nielsen’s global survey on Fair Trade (2008), only half of the European consumers can “always recognise the Fair Trade products”. Moreover, recent studies on green/ ethical products had similar findings. (eg.: http://tinyurl.com/l9q9vh )

In my opinion, the proliferation of certification schemes is a result of the mainstream/ mass market-oriented approach of the fairtrade movement. It’s an ongoing procedure and we should wait to see which of these labels will be genuine enough to remain in the market.

Hey Konstantinos many thanks for getting back with such a comprehensive reply so quickly. Thanks also for providing those references and recent studies.

Can certainly see the link with a lot more “green” labelling. I am struggling to see clear indications of recent “proliferation” of fair-trade certification schemes. Maybe I am missing something, but thought in terms of Fair Trade there was only really FLO-Cert, the WFTO Mark and the newest one Fair For Life cert covering non FLO products?

Are you and Patrick saying that the “green” labelling is getting mixed up with the “FT” labelling in the minds of the consumer and that is where the confusion and potential devaluing of Fair Trade concept is coming from?

Hi Scott,

You are correct, there are only the FLO-Cert, the WFTO Mark and the newest one Fair For Life cert covering non FLO products. There is also the Fair Trade Small Producers label as well (http://www.clac-pequenosproductores.org/english/profile/aboutus.html), but I’m not sure how prevalent it is. The point I was trying to make was that the value of the fair trade labels mentioned above is being degraded by the proliferation of other ‘ethical’ labels (e.g. Rainforest Alliance). I believe this to be a very serious threat to the fair trade movement going forward.

Patrick

Thanks for this article. I thought as much but am happy to see more concrete evidence. Are (Titus and Bradford, 1996; Carrigan and Attalla, 2001) books or articles? If the latter, could you provide the journal?

Thanks,
Michael

[...] label without having to pay the extra cost or engage with the underlying principles. Here’s a great article on the topic. digg_bgcolor = ‘#ffffff’; digg_skin = ‘compact’; digg_window = ‘new’; [...]

Hey Michael,
Many thanks for the comment. The academic papers mentioned above are:

-Titus, P. & Bradford, J. (1996). “Reflections on Consumer Sophistication and its Impact on Ethical Business Practice”, The Journal of Consumer Affairs, 30: 1, 170–194

-Carrigan, M. & Attala, A. (2001). “The Myth of the Ethical Consumer – Do Ethics Matter in Purchase Behaviour?”, Journal of Consumer Marketing, 18:7, 560–578

Send me an email to: kon.ioannidis [at] yahoo.co.uk , if you cannot find the full text online.

Hi, i work for Unilever, a multinational consumer goods company that works with a number of external certifiers, including Fairtrade, Rainforest Alliance, Marine Stewardship Council, and Roundtable for Sustainable Palm Oil. I am writing this in a private capacity.

It is true that there is consumer confusion about the various labels. Very few consumers are informed enough that they can explain what these labels exactly stand for. At the same time, the proliferation of labels shows the market place at work, trying to address the various issues. Sustainability is a complex subject. Fairtrade is great but what about global warming? As our knowledge develops, new labels will emerge and I see that as healthy innovation.

What is important is the credibility of a label- and that’s why I am surprised that ISEAL hasn’t been mentioned. http://www.isealalliance.org/ ISEAL is the de facto gold standard for labels and FT, RA, FSC and MSC are all members.

I believe what’s really harmful is articles like the post on the ‘Labor is not a Commodity’ blog referenced above. FT and RA have different objectives. Both schemes have their strengths and weaknesses. They’re complimentary, and both further sustainable development, but in different ways. To say one is better than the other is like saying apples are better than oranges.

Unfortunately some people see certification schemes as a zero-sum game- if RA wins then FT loses. This is doing a disservice to both schemes. The reality is that we shouldn’t focus on the difference between RA and FT. We should focus on the difference between credibly certified and non-certified goods.

I therefore strogly disagree that ‘the value of the fair trade labels mentioned above is being degraded by the proliferation of other ‘ethical’ labels (e.g. Rainforest Alliance).’

I don’t believe this is a ‘one size fits all’ issue – there are several systems available to help us move towards a more sustainable and equitable business in a geographically and economically diverse industry – and I believe that a combination of these systems will deliver the best results.

Hi Michael

Some very interesting thoughts there. As there are different criteria to meet for each certification, do you know why Unilever have gone for a mix of labelling? I agree it shouldn’t be a case of one versus another in an ideal world, but there is a lot of confusion amongst consumers as to what this all means – even down to things such as fairly traded equals organic. Wouldn’t one label alleviate that?

@Michiel,

Thanks for your very interesting and informative perspective on this ‘labelling’ issue. Thanks particularly for the info on ISEAL. It was interesting to see that FLO is a founding member!

The points you make about credibility analysis ‘between’ certified and not certified, add another dimension to the credibility analysis ‘among’ certification schemes.

I would certainly support your point that seeking to better understand each other’s perspective is preferable to denegrating ‘the other’ and setting up a ‘them and us’ competitive context that fosters confusion.

In a similar vein, it would seem that a quest for a ‘unified’ and ‘consistent’ fair trade voice would go a long way in enhancing the credibility of any fair trade labelling and reducing consumer confusion. Something that is not particularly evident at the moment.

@Charlotte: different problems require different solutions. Each labelling scheme is focused on certain issues. For fish, overfishing is the main issue. For palm oil it is deforestation. Neither of these can be addressed with for example the Fairtrade label, which is focused on relieving poverty among smallholder farmers and the price they receive for their crops.

Unilever has stated that one of the reasons it chose Rainforest Alliance for tea is that its tea is sourced from both smallholder farms as well as large estates. For example in coffee, Fairtrade works exclusively with smallholders. Rainforest Alliance works also with large plantations. It’s just one of the differences between the schemes, but it doesn’t mean one is less valid or stringent than the other. They both have a role to play, and they both make an important contribution towards sustainability.

Similarly, neither the Fairtrade or Rainforest Alliance label means the crop is Organic (although sometimes producers go for double or triple certification, making them both FT/RA and Organic). Organic focuses on the use of agrochemicals. If a pest were about to wipe out a farmer’s crop, being organic might mean the farmer has to risk his whole crop as he can’t use the most effective pesticides. RA and FT allow the use of agrochemecials (but in a controlled and responsible way) to ensure the financial livelihood of the farmer in a case like this.

That’s why the simplicity of ‘one label should be enough’ in reality simply doesn’t work. Apart from the fact that I don’t know who would decide what that one right label should be. The Government? The UN? How do we know they will get it right?

@Scott-
the fair trade movement would indeed greatly benefit from having for example a single global label across the globe. Right now they don’t. I have been responsible for the marketing of a Fairtrade (FLO) certified product, which we couldn’t sell in one market because the local FLO chapter wouldn’t allow the ‘wrong’ logo in its markets…

BTW I would encourage you to check out these National Geographic videos about Rainforest Alliance and Lipton tea.

http://www.nationalgeographic.com/video/player/environment/habitats-environment/lipton-sustainabilitea/workers-lipton.html

or the videos about Ben & Jerry’s and Fairtrade.

http://www.benjerry.co.uk/fairtrade/#

I would definitely agree that there is great confusion amongst consumers regarding labelling. For example, I only recently discovered that the FAIRTRADE Mark can only be used on certain products – i.e. food and drink. Items such as handicrafts cannot be certified fair trade using this label so, if I understand the situation correctly, the fair trade companies working with items such as handicrafts have to instead gain membership to the WFTO and display their label instead.

I have also come across confusion between fair trade and organic items. Green&Blacks chocolate is a good example – it used to be marketed as a fair trade product, but no longer carries the FAIRTRADE mark and instead is marketed based on its organic nature. Bananas are another product where some are certified organic and some carry the FAIRTRADE mark and many consumers don’t understand the key difference between these labels.

Finally, I agree that it is exceedingly concerning that Kraft appear to have a major stake in the Rainforest Alliance organisation. If organisations such as the Rainforest Alliance are to maintain the respect of the general public then they cannot be seen to be under the thumb of multinationals like Kraft. If this connection is made then it will be detrimental not only to the Rainforest Alliance but also to other ethical labels aiming to promote ethical practices for the right reasons.

[...] bananas — which are better options than regular bananas, but controversial, since the Rainforest Alliance’s standards tend to be lower than that of other ethical [...]

I live in Costa Rica, where I work for the Rainforest Alliance, and I’ve seen what a huge difference these certification programs have made in the way farming is done in the tropics. These are important and measurable changes.

Different programs take different approaches…consumers can trust programs accredited by ISEAL, as Michiel Leijnse points out. Spending time debating whether Rainforest Alliance or organic certification is “better” than Fairtrade or vice versa doesn’t help consumers, farmers or ecosystems. After all, there are numerous nonprofit groups that have similar objectives, but have different approaches. We leave it to informed citizens to donate to those they decide deserves their support. The overall goal is to make the Earth a better place to live. All ISEAL accredited programs share that important aspiration and deserve applause.

Hi, I also work for the Rainforest Alliance, and worked for a Fairtrade organisation for 7 years. Both Fairtrade and Rainforest Alliance are powerful and credible systems to raise awareness amongst consumers about the origins of the products they buy, and provide them with a opportunity to make the world a better place through their everyday purchases. We are all in this together, there is absolutely no point in arguing which system is better. The systems are complimentary, and some producers are indeed double-certified Rainforest Alliance-Fairtrade, since it allows them to gain access to more value-added markets.

Personally, I do not buy the argument that consumers will be confused by different ethical labels. Everyone, even very young children, has the ability to recognise / memorise hundreds of brands and know what they stand for, from soap, to paint, to butter, to cars; it’s a discredit to today’s sophisticated consumer to think that he/she can’t tell the difference between 3 or 4 labels. Better still, it’ll make the consumer more inquisitive about the different labels and how their goods were produced.

@ By Hand: Kraft, like many other companies, individuals and institutional donors, invests in the Rainforest Alliance’s capacity building programmes at origin, in order to contribute to local conservation efforts, train farmers on good agricultural practice and help them prepare for certification. This is completely separate from the audit and certification decision, which is carried out by an independent body, the Sustainable Agriculture Network (SAN), a network of conservation organisations based in southern producing countries. Neither the SAN, nor The Rainforest Alliance certify companies; the SAN certifies farms; the Rainforest Alliance then awards a seal to products that contain produce from those farms. In Fairtrade, companies like Cadbury’s, Starbucks or Nestle pay Fairtrade a licence fee to use the Fairtrade mark on particular Fairtrade products. Part of this fee goes to Fairtrade Labeling Organisations Int’l (FLO) in Germany, who then invests it in capacity building programmes in producing counties. This is again separate from the certification decision, just like the Rainforest Alliance. These are simply different approaches to achieving the same result: companies investing in buidling sustainable supply chains.

We can create democratic marketing schemes that allow the public to create online ads to promote ethical certification marks. When it comes to social networking, pulling power is pulling power. Because of this, those marks whose ad campaigns receive the most public advertisements create a positive feedback loop until they establish a monopoly and all other marks lose their respective brand equity. Don’t worry, I’ll show you what I’m on about and we can change the world.

Simon