A EUROPEAN REVIEW 159

Ethical Consumerism: The Case Of

``Fairly-Traded'' Coffee
Kate Bird and David R. Hughes

Consumer concern for ``ethical products'', or ethical aspects of the goods which they purchase,
is a subject of increasing interest and research, which is here illustrated by an examination
of the Fair Trade movement, with special reference to coffee as an indicative commodity.
Kate Bird is currently Lecturer in the Development Administration Group, School of Public
Policy, Birmingham University, Birmingham B15 2TT, England, having previously worked
abroad and written her MSc dissertation at Wye College on fair trade in coffee products.
Dr Hughes holds the Sainsbury Chair in Agribusiness and Food Marketing at Wye College,
University of London, Wye, Ashford, Kent TN25 5AH, England (email: D.Hughes@wye.
ac.uk), where he is also Director of the Food Industry Management Group. He has wide
international experience of food management issues.

``T hroughout Europe, consumers are

demonstrating that they are con-
cerned not just about the quality of products
they buy, but where and how they were
produced and who benefits from their pur-
chase.'' (Burns, 1995). The increased avail-
ability of these products reflects a growth in
the size of the `ethical' niche. Companies have
had to reassess their practices and, in many
cases, publish statements of their environ-
mental and ethical policy along with their
annual reports. Some have even had to run
specific advertising campaigns to counter
adverse publicity (Mintel [b] p. 9).
The incorporation of ethical components
into the bundle of characteristics making up a
product means that consumers' world views
can be reflected in their consumption de-
cisions, contingent on both their level of
commitment towards an ethical issue and
their level of disposable income. Although the
willingness to purchase goods based on their
ethical credentials is limited to a small
minority of shoppers, an increasing percen-
tage of shoppers say that, despite the current
economic climate, they would pay a premium
for food that was entirely environmentally
friendly and ethical (Mintel [b] p. 9).
This paper explores Fair Trade as a sub-set
of ethical consumerism, and takes coffee as an
indicative commodity. Fair Trade is a term
which has emerged largely through usage
by European Non-Governmental Organis-
ations [NGOs] and Alternative Trading
Organisations [ATOs] to differentiate the
products they source and retail from those in
the mainstream commercial market. The term
implicitly highlights the unfairness of many
commercial interactions. This is clearly a
normative statement. However, as illustrated
in greater detail below, Fair Trade practices
differ from those of purely commercial profit
maximising trade in the attempt to deliver
tangible benefits to small producers. These
benefits include transparent negotiations, in-
formation symmetry, and price premiums
delivered to trading partners. (Fair Trade is
defined in greater detail in the text below.)
The ethical standpoint which underpins
the Fair Trade movement is strongly linked
to the philosophies of European ATOs, who
base their commercial and trading practises
on the premise that the majority of world
wide trade fails to benefit small producers.
These producers are viewed as being unable
to benefit from a global economy which
blocks market entry in many sub-sectors,
and a trade regime which contains numerous
information and negotiating asymmetries.
ATOs view their activities as a challenge to

# Blackwell Publishers Ltd. 1997. 108 Cowley Road, Oxford OX4 1JF
and 350 Main St, Malden, MA 02148, USA. Volume 6 Number 3 July 1997
160 BUSINESS ETHICS

the norms established in international mar- Selfish Consumers ±

kets by the neo-liberal paradigm, and as an
alternative to the potentially dependency
inducing flows of aid and charity funds. This
radical stance appears to reflect increasing
consumer concern.
``armchair ethical'' The Size of the Market Niche for
Ethical Products
For the purposes of this paper, consumers
have been divided into three main groups:
Ethical Consumers ±
. primarily motivated by their ethical stance
. will trade off other product/brand benefits
for the ``feel good factor''
. will pay a premium for charity alone.
Semi Ethical Consumers ±
. primarily motivated by perceived quality
and brand `status'
. ethical benefits are an emotional bonus
. some suspicion of `charity' brands, but
open to persuasion.
. conventional quality/price motivators
. suspicious of any `charitable' claim.
The totally-committed ethical shopper com-
prises 5 per cent of the shopper population
(table 1); with 18 per cent claiming to try to
buy ethical products ``as far as possible''. Most
consumers (56 per cent) can be categorised as
``slightly ethical'', or ``armchair ethical''; with
17 per cent expressing no interest in ethical
products (Mintel [a] p. 74).
Of consumers surveyed who were pre-
pared to pay a premium for ethical prod-
ucts, premiums suggested ranged between
10 pence and 18 pence in the pound (£). Those
most willing to pay were: women; those in
socio-economic classifications ABC1 ; and
those under 35 years old (Mintel [a] p. 84).
These groups form the prime target markets
for ``fair trade'' products.
What is Fair Trade?
In essence, it comprises sourcing products
from peasant producers on terms that are

Table 1. Willingness to buy ethical products 1990 & 1994

1990 1994 % point change

1990±1994

base: adults 1,336 981

% %

always/nearly always buy/use 4 5 +1

try as far as possible to buy/use 16 18 +2
TOTAL `ETHICAL' 21 23 +2

tend to buy/use if I see them (`slightly ethical') 19 21 +2

care about the issues, does not affect spending habits 28 35 +7
(`armchair ethical')
TOTAL `SEMI-ETHICAL' 47 56 +9

do not care about issues/does not affect spending 19 16 ±3

habits
ethical issues a waste of time/avoid ethical products 3 1 ±2
TOTAL `SELFISH' 22 17 ±5

DON'T KNOW 9 4 ±5
TOTAL 100 100

Source: BMRB/Mintel, 1995.

Totals may not equal 100 due to rounding.

Volume 6 Number 3 July 1997 # Blackwell Publishers Ltd. 1997

A EUROPEAN REVIEW
favourable relative to pure commercial terms,
and merchandising them in developed coun-
tries at an ``ethical premium''. `Fair' can cover
a wide range of interpretations, but Burns
[1995] argues that `fair trade' should incor-
porate transparent trading partnerships,
which should benefit both parties. This can
be achieved where commercial interactions
are based on respect, and result in the
empowerment rather than the exploitation
of producers. Important elements of Fair
Trade are:
. direct purchasing from producers
. long term purchasing agreements
. provision of market information
. technical assistance
To ensure that the benefits of Fair Trade are
not accruing to unscrupulous employers, the
ATOs require that their trading partners
provide the national minimum wage, meet
health and safety requirements, do not use
bonded, forced, prison or child labour, and
give workers the right to organise (this
includes free collective bargaining).
In addition to concern for the producers,
Fair Trade broadens its ethical stance to
incorporate a concern for natural resource
management, and an awareness of consumer
needs. Environmentally sustainable develop-
ment is encouraged through technical assist-
ance to producers, and advice to consumers.
ATOs and other organisations involved in
Fair Trade hope that information provided
through promotional campaigns will encour-
age consumers to base purchasing decisions
upon a better understanding of international
trading relations. This understanding is rec-
ognised as not being sufficient to ensure
repeat purchases or brand loyalty, so, in an
attempt to eradicate the historical association
consumers have made between `charity
goods' and poor quality, emphasis is increas-
ingly being placed on product quality, with
marketing highlighting the message that
goodwill will not be abused to excuse poor
products or services.
This complex set of ethical ideas is proving
difficult to reduce into codes of practise or
internationally accepted standards. Never-
theless, standards are gradually being drawn
up for a range of goods. This process has
been completed for fairly traded coffee, and
standards now determine that obligations are
met by purchasers on issues encompassing
price, pre-financing and contract continuity.
NOP Consumer Market Research in 1994
undertook a large sample size survey of
consumer attitudes to fair trade products.
Approximately 40 per cent of respondents
said that they were aware of fair trade
# Blackwell Publishers Ltd. 1997
161
products on sale in supermarkets, and 10 per
cent claimed to purchase them. Over 50 per
cent of those surveyed expected fair trade
products to be of the same quality as similar
products. Over half of AB consumers sur-
veyed stated that they would prefer to buy
fair trade products than give money to
charity. The survey was commissioned by
the trade magazine SuperMarketing who
concluded ``ethical products are clearly
bursting out of their niche'' (SuperMarketing,
1994).
An Analysis of Key Fair Trade
Systems
Fair trade initiatives in the UK can be placed
into three basic categories:
. the socially responsible corporation/
benign marketing agents;
. branded products; and
. products verified by third party
± Independent Trademarking, indicating
third party verification;
± any of the above verified by a system of
Social Auditing.
One of the most important fair-traded items is
coffee ± although only representing 0.01 per
cent of world coffee production, it does
involve two hundred co-operatives world-
wide representing the interests of 500,000
farmers in sixteen coffee-producing countries
(APROM). In this article, coffee is taken as an
indicative commodity of fair trade.
Socially Responsible Corporations
The Socially Responsible Corporation can
take the organisational form of an alterna-
tive trading organisation (ATO). Such
organisations can be divided broadly into
two groups:
. those whose activities in trade have grown
out of NGO-based work with peasant
communities in developing countries; and
. those whose business activities form a part
of the wholefood/independent retailers
network, albeit with links with the devel-
opment-based ATOs.
There appear to be differences in institutional
philosophy and methodology between the
groups, with the latter being more profit
oriented. The principal activities of major
UK-based ATOs is shown in table 2.
Products are sourced largely from small
producers who would not otherwise have
access to the UK market, although some
Volume 6 Number 3 July 1997
162
Table 2. Activities of key UK-based ATOs
ATO
Traidcraft
Oxfam Trading
Twin Trading
Equal Exchange
Tearcraft
Shared Earth
Bishopston Trading
Adapted from `EFTA ± Survey of Fair Trade in Europe', 1994.
ATOs may also source from larger, more es-
tablished producers' groups who also export
through conventional trading companies.
Although the UK's largest ATOs, Oxfam
and Traidcraft, are well established as fair
trade importers, they have captured only a
small share of the coffee market, due to:
. lack of access to the major multiples (with
the exception of CafeÂdirect ± see later);
. the strong trend away from highstreet
shopping and towards the major multiples;
. the inconvenient location of many of the
retail outlets;
. low level of promotional activity by ATOs;
. the lingering public perception of low
quality, poorly packaged goods for ``fair
trade'' products;
. premium pricing.
Oxfam Trading is the largest ATO in the UK,
with a retail turnover (net of second hand
clothing sales) of around 12.7 million ECU
(EURO) in 1994. Traidcraft's retail sales are
around 5 million ECU (EURO).
Branded Products
Fairly traded branded goods fall into three
main categories.
1. Commercially imported and sold goods
which are self validated by the traders as
being fairly traded; for example, Body
Shop Trade Not Aid products; Premier
Brand Teas ± Typhoo; and Nestle coffee
products.
2. Goods with third party verification in the
form of the Fairtrade Foundation's (FTF)
quality mark (a trademark established by,
inter alia, Oxfam to identify bona fide fairly-
traded goods). The FTF verification indi-
cates that the conditions of trade for the
product have met the FTF's independently
Volume 6 Number 3 July 1997
BUSINESS ETHICS
Importer Wholesaler Retailer
x x x
x x x
x x
x x
x x
x x
x x
set standards and criteria. The current list
of products carrying the FTF mark is
Clipper Teas; Green and Black's Maya
Gold Chocolate; CafeÂdirect's Roast and
Ground and Freeze Dried Coffees; and
Seyte Organic Teas.
3. Products which are provided with third
party verification provided by way of an
independently conducted Social Audit.
Traidcraft, Shared Earth and The Body
Shop are the only companies involved in
the sale of fair trade products who have
adopted this methodology.
Third Party Verification
`The ethics ``market'' is a volatile one and few
issues provoke more heated discussion than
ethical performance, . . .' (Mayo 1994). By
the end of the 1980's there was growing
consumer interest in fair traded products
in Europe. Some ATOs and NGOs wanted
to exert pressure on commercial companies
to change their procurement practices. There
was a fear that manufacturers would capi-
talise on the marketing advantage (provided
by the fair trade proposition) without alter-
ing their trading methods, encouraging
damaging consumer scepticism.
Fair trade organisations established an
information network and now liaise regularly
on an individual basis and through the
International Federation of Alternative Trade
(IFAT) and the European Federation of
Trading Associations (EFTA). The trademarks
launched in Europe have ensured that they
share many of the same criteria, and do not
attempt to enter the national market covered
by another mark. They indicate that the
product bearing them has met with strict
third party verification which aims to assure
consumers that the product fulfils its market-
ing claims (table 3).
# Blackwell Publishers Ltd. 1997
A EUROPEAN REVIEW
Table 3. The main European groups allocating fair trade marks
Name Country
Max Havelaar Foundation Netherlands
Belgium
Switzerland
France (Brittany and Alsace-Lorraine)
Luxembourg
Denmark
Transfair Germany
International Luxembourg
Japan
Austria
Fairtrade Foundation UK
Source: EFTA, IFAT.
The Fair Trade Foundation (FTF) was
established in 1992 by Traidcraft, Oxfam,
Christian Aid, CAFOD, World Development
Movement and The New Consumer, and was
later joined by the National Federation of
Women's Institutes. Licensees pay 2 per cent
of retail value to FTF for use of the mark. All
coffee products bearing the mark must be
sourced from suppliers meeting specific
criteria which ensure that producers receive
direct benefits. Suppliers must be listed on the
International Coffee Register (ICR), which
makes regular supply side checks. The UK
side of operations is audited by FTF staff who
ensure that licensee contracts and actions
conform to guidelines.
Healthfood wholesalers welcomed the
launch of the first products bearing the
Fairtrade Mark in 1994 as providing an
additional selling point for the products
amongst a consumer group who tend to be
sensitive to ethical issues and are prepared
to select products (and not buy others) on
the basis of their ethical credentials. The
FTF currently devotes about 15 per cent of
its budget to publicity and promotion, but
it is faced with low level of awareness of
the mark and of fair trade issues. The com-
plexity of the issues involved means that
creating consumer demand for fair trade
products will be a slow, iterative process.
Although marks can be carried by private
label products in addition to brands no major
private label products have been licensed
(EFTA 1994).
Social Auditing was first applied to fair
trade by Traidcraft, in co-operation with the
New Economic Foundation, to provide com-
# Blackwell Publishers Ltd. 1997
163
Date launched
1988
1991
1993
1993
1993
1994
1993
1994
1992
mercial companies with objective third party
verification, and is especially suited to com-
panies with large portfolios of products too
complex (or inappropriate, e.g., banking
services) for alternative systems of verifi-
cation. Stakeholder consultation allows the
social repercussions of an organisation's
activities, usually taken to be intangible, to
be captured and analysed. Annual publi-
cation of audit reports provides the necessary
transparency for companies to avoid being
idealised or dismissed as being merely in-
efficient (Mayo, 1994). A key shortcoming of
the technique is that, although it collects in-
formation useful to shareholders, staff, and
trading partners, it does not have the im-
mediate consumer appeal offered by marks.
A Case Study of CafeÂdirect
CafeÂdirect was formed by a consortium of
long established British ATOs: Equal Ex-
change, Oxfam Trading, TWIN Trading, and ethical credentials
Traidcraft. It differs from previous ATO/
NGO fair trade enterprises by competing for a
share of the mainstream coffee market with
its roasted and ground and freeze dried
coffees, launched, respectively, in October
1991 and September 1994. The consortium
aims to use CafeÂdirect to benefit small-scale
coffee growers, to develop a dialogue with
retailers, and to influence the attitudes and
habits of consumers (Development Initiatives,
1995). The respective roles of consortium
members are outlined in table 4. CafeÂdirect
has two basic product groups ± roasted coffee
beans and ground coffee; and soluble, instant
Volume 6 Number 3 July 1997
164
Table 4. CafeÂdirect Consortium Members and
their role
Traidcraft Retail (shops, mail
order), cash flow1
TWIN Trading Importing, managerial
support, provision of
much of the original
funding
Oxfam Trading Retail (shops and mail
order), cash flow1
Equal Exchange Marketing, sales
(accessing multiples,
etc.), retail (mail order
and wholesale), cash
flow1
1
provide funds to co-operatives to ensure prompt
payment to farmer suppliers.
coffee ± both marked under the CafeÂdirect
label.
Supply Considerations
Although a large number of small scale coffee
producers meet CafeÂdirect fair trade supplier
criteria, co-operatives must be capable of
direct export. Technical assistance is provided
to build institutional capacity and improve
product quality. Initially CafeÂdirect sourced
green coffee beans from three co-operatives
and by 1995 had increased this to fourteen,
with the original three remaining as core
suppliers, in line with their policy of main-
taining long term trading relationships. The
percentage of harvest exported through the
consortium's coffee sourcing organisation,
TWINcafe, does not dominate any co-oper-
ative's enterprise. Further, sourcing from a
wide range of producer groups allows CafeÂ-
direct to `spread the benefits' and assist
producers in developing their own marketing
strengths. The broader supply base also
ensures seasonal spread and provides a range
of coffee types to satisfy blending require-
ments. Coffee is sourced from Peru, Nicar-
agua, Costa Rica, the Dominican Republic,
Mexico, Tanzania and Uganda.
Arrangements prior to harvest provide
producers with schedules of anticipated demand
for the following harvest season. These do not
constitute advance contracts but provide a
demand benchmark for co-operatives and
ensure continuity of supply for CafeÂdirect
(scope remains for small variations on either
side). To reduce risk co-operatives can ar-
Volume 6 Number 3 July 1997
BUSINESS ETHICS
range a fixed price contract to match their
commitment to farmers. The specific contract
type is selected based on a co-operative's
experience in the world coffee market. TWIN-
cafe ensures that producers enter negotiations
with them and other importers on a relatively
equal basis by publishing a regular coffee
market up-date. It differs from other price
listings in that it is specifically aimed at small
producers who have limited access to inter-
national and importer country market infor-
mation and provides reliable information on
indicator price movements.
All producers are guaranteed a flat mini-
mum price, regardless of location, based on
the New York Contract (NYC) for coffee
minus a small transportation cost. The Max
Havelaar Foundation, via its International
Coffee Register (ICR), negotiated a minimum
price structure for fair trade coffee products
in June, 1995. CafeÂdirect pays either the
market price (plus or minus a differential
based on the quality and market demand
for the grade being purchased), plus a mini-
mum premium of 5c/lb, or the ICR price for
the grade and type in question, whichever is
the higher.
The premium is purposely delinked from
the commercial element of the price for two
key reasons: it ensures that producers are
aware of market prices, reducing the danger
of the fair trade price acting to stimulate over-
production; and consignments must be
weighed and assessed for quality on arrival,
premiums only being paid once both pro-
cedures have been completed.
At high coffee price periods producer co-
operatives may have difficulty in financing
coffee purchases from producers. They also
risk falls in market price while carrying stock.
Risk aversion may prevent the expansion of
co-operatives' activities. Provision of short
term operational finance to cover shipping
charges and coffee purchases has therefore
become a core element of fair trade strategy
and is especially important in the pre-season
period when producers may be driven to sell
at distressed prices.
Benefits to Producers
A key question is whether purchasing coffee
under fair trade terms benefits producers in
the long term, as perceived benefits may
delay producers transferring from coffee
production into other enterprises in which
they have comparative and competitive ad-
vantage. Systematically collected data is
unavailable and the decision of what pro-
portion of price premium is to be transferred
to producers is made by the co-operative.
# Blackwell Publishers Ltd. 1997
A EUROPEAN REVIEW
As a result the increase in producer in-
comes varies from co-operative to co-oper-
ative, and within each co-operative, depend-
ing on what proportion of the harvest an
individual producer is able to sell under fair
trade terms.
Tangible benefits to producers are evident.
The dangers of variability of demand and
therefore income are lessened by reliable
purchasing arrangements. Small prepaid
sales early in the harvest reduce sales at
distressed prices. Following a fair trade trans-
action early in the harvesting season pro-
ducers' short-term cash requirements are
fulfilled. They may therefore use the co-
operative as a conventional intermediary
for accessing international markets via com-
mercial exporters. Technical assistance is
provided to assist producers improve the
quality of their coffee and increase its market-
ability, and to improve co-operative cost
effectiveness and efficiency in accessing inter-
national markets.
Market Considerations
CafeÂdirect has no plans to extend its range of
coffee products, as there is a concern about
over-segmenting what is only a niche market.
Its entry into the instant coffee market,
however, is indicative of the company's
commercial confidence.2 Logistics and brand-
ing requirements necessitate blending, pro-
cessing and packing of the coffee to be based
in Europe. All coffee imported by TWINcafe
for CafeÂdirect is therefore brought into the
EU as green coffee.
CafeÂdirect's roasted and ground coffees are
processed and packed under contract in the
UK. The freeze dried product is processed
and packed on the continent of Europe.
Processing cannot take place in the UK as
the only two plants in the UK are owned and
used solely by Kenco and NestleÂ, CafeÂdirect's
principal competitors. CafeÂdirect's products
are distributed under contract to the major
multiples and other retailers from a central
warehouse. Both CafeÂdirect products are
retailed through ATO shops, mail-order and
membership networks, `independents' and
the major multiples (table 5). CafeÂdirect has
a current price premium of 5±10 per cent over
commercial premium brands.
British ATOs have worked with the mem-
bers of the CafeÂdirect consortium to increase
consumer awareness of, and demand for,
fairly traded products. This has allowed
CafeÂdirect to maximise the benefits derived
from a large network of highly committed
volunteer lobbyists and to reduce promo-
tional spend dramatically. CafeÂdirect's target
# Blackwell Publishers Ltd. 1997
165
market for the roasted and ground products
can be broadly summarised as follows:
. semi-ethical consumers
. middle to upmarket users of roasted and
ground coffees (ABC1 aged 25±55)
. confident well informed consumers (who
will buy a brand which signals their
intelligence and discrimination to others).
Table 5. CafeÂdirect Launch dates
Oxfam October 1991
Co-operative Wholesale March 1992
Society (CWS)
Safeway April 1992
Waitrose November 1992
Gateway February 1993
Asda March 1993
Wm Low March 1993
J Sainsbury June 1993
Co-operative Retail June 1993
Society (CRS)
Tesco July 1993
Kwik Save October 1993
Nisa January 1994
Source: adapted from information in SuperMarketing
(22 April 1994)
Purchasers of the premium CafeÂdirect prod-
ucts, that is, roasted and ground coffee, are
more likely to be supportive of develop-
ment issues and less worried about being
told that they are doing good by their
purchase than are purchasers of the Cafe-
direct instant coffee. In the instant coffee
market quality and price are the two im-
portant issues. Consumers like to `discover'
that they are doing good and the belief is
that this discovery process will influence
future purchases and build brand loyalty
(Development Initiatives, 1995). CafeÂdirect
has therefore faced a dilemma in attempt-
ing to attract the core group of ethical con-
sumers without alienating the semi-ethical
consumers by an over emphasis of its ethical
credentials.
In 1994 CafeÂdirect roasted and ground
coffee was priced at £1.55 per lb (454g) and
had a national market share of about 2.8 per
cent of a UK market worth approximately
£55 million, indicating that sales volumes
were just under 220 tonnes per year with a
retail value in the order of £1.5 million. The
market share figure for the freeze dried
product has not been released, due to its
Volume 6 Number 3 July 1997
166
commercial sensitivity. However, discussions
with the coffee buyers of the major multiples
and others in the industry indicate a scepti-
cism with regard to its likelihood of success
due to low consumer awareness in the target
market, high price, low brand loyalty, and
unattractive packaging (retail coffee buyer
interview).
Conclusions
Fair trade can offer benefits to small-scale
producers: more than enhanced prices, the
benefits are delivered through institutional
capacity building of producer marketing
organisations, technical assistance to redress
product and marketing problems and access
to mainstream markets. The market share
and market value of fair trade products are
small both in absolute terms and relative to
those of environmentally sensitive products
(CWS, 1995). Further, due to lack of data
and the low volumes of coffee exported
using fair trade marketing systems, a causal
relationship between fair trade and en-
hanced producer welfare cannot be proved
categorically.
Current fair trade coffee products will
struggle to establish themselves in the highly
concentrated UK grocery food and beverage
market: the top five supermarket chains
account for around two-thirds of national
grocery sales; supermarkets are particularly
patronised by higher income consumers
(the principal target market for fair trade
products) (Hughes, 1996); and three multi-
national corporations account for over 80 per
cent of instant coffee output in the UK.
Fair trade products from Oxfam Trading,
Traidcraft and other ATOs are likely to con-
tinue to appeal to a small niche of committed
ethical consumers. However, without access
to the major multiples they will be unable to
increase market share sufficiently to scale
up their fair trading operations. As a result
benefits to producers will remain limited.
CafeÂdirect, as the only fairly traded coffee
listed by the supermarket chains, is the
company most likely to influence consumer
consciousness and benefit producers, both
through direct purchasing activities and by
influencing trends in business ethics. How-
ever, to gain a significant share of the instant
coffee market CafeÂdirect would have to invest
substantially in production and research and
development if it was to attract a wider
consumer base.
While volume sales of fairly traded coffee
a catalyst to are undeniably small the influence on public
provoke change opinion can act as a catalyst to provoke
Volume 6 Number 3 July 1997
BUSINESS ETHICS
change in the mainstream trade (Develop-
ment Initiatives, 1995). Cafe direct has
achieved a sufficiently high level of public
awareness to initiate this process. Although
a large portion of the public remains un-
aware of fair trade issues the importance of
purchasing policy and producer welfare
for the corporate image of multinational
manufacturers and the major multiples is
growing. For example, Premier Brands uses
its ``exemplary purchasing policy'' as a
marketing tool, and Nestle has felt obliged
to report to its shareholders the company's
purchasing policies with, and involvement
in, developing countries.
It is ``leading by example'' initiatives of
fair traders that most likely will be their
most important contribution to improving
commercial conditions for small-scale pro-
ducers in developing countries in the longer-
term. An analogy of the activities of the
German section of Greenpeace in influencing
refrigerator coolant usage is germane. Green-
peace strongly endorsed the products of a
refrigerator manufacturing company (Foron)
that replaced hydro(chloro)-fluorocarbons
with a more environmentally-friendly mix-
ture of propane and butane. Major manufac-
turers were driven by market pressure to
switch to this more ``friendly'' coolant mix in
short order.
CafeÂdirect has a key role in determining
the degree of influence of fair trading com-
panies to have an impact on the purchasing
policies and practices of mainstream food and
beverage manufacturers and retailers. Even
with a very modest market share CafeÂdirect
products set the ethical standard for others
to match ± if they are competing side-by-side
on the retail shelves of major retailers with
the nationally-branded coffee products. In
European consumer societies an increasingly
broad band of shoppers exhibits complex
buying behaviour in which, while value for
money concerns are important, purchasing
per se contributes towards self-development
and realisation (Maslow, 1954) .
Notes
1. The ICR lists producer groups world-wide
meeting criteria established by the Max
Havelaar Foundation.
2. In 1993, the UK coffee market had a retail sales
value of £577 million (Mintel), of which the
instant sector accounted for 91 per cent. The
instant coffee market is highly concentrated:
three manufacturers, NestleÂ, Kraft General
Foods (Philip Morris) and Brooke Bond
(Unilever), account for 82 per cent of output.
# Blackwell Publishers Ltd. 1997
A EUROPEAN REVIEW
References
BURNS, S. Fair Trade: A Rough Guide for Business.
TWIN, 1995.
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