Sainsbury’s Ditches Fairtrade and Replaces it with ‘Fairly Traded’ Tea

A storm is brewing surrounding British supermarket chain Sainsbury’s decision to launch its own brand of ethically sourced tea. The pilot project, branded “Fairly Traded,” will offer farmers a guaranteed minimum price for their crop, as well as a “social premium” to invest in development programs, reports the Belfast Telegraph.

But the company has been criticized by the Fairtrade Foundation, which claims that the program will take control away from growers because they will no longer receive the social premium funds automatically. Sainsbury’s will provide the social premium—an extra payment on the basic price—through its own foundation, which will help devise individual projects for farmers through an advisory board.

In contrast, Fairtrade’s premium fund is given directly to communities, and an association made up of farmers decides how the money is used.

Michael Gidney, CEO of the Fairtrade Foundation, said that the Sainsbury’s model does not meet Fairtrade’s core principles, particularly in the area of “producer empowerment.”

In a statement Gidney said: “Whilst we welcome and expect companies to work towards improving social, economic and environmental outcomes within their supply chains, we don’t believe the execution of this current model will, on balance, deliver positive changes for tea farmers.”

Top of the list of concerns for the organization was the fact that farmers would go from being in control of the money they earned to spend on community and local projects to having to apply to a board in London to access the money, with no guarantee they would receive it.

Fairtrade, which is 50% owned by farmers and producers, said that after consultation with farming groups in Africa the response was overwhelmingly against a further layer of bureaucracy controlled by a group far removed from the day to day life in Africa and elsewhere.

The British charity Oxfam waded into the row and said Sainsbury’s was in danger of taking a “regressive step.” Oxfam’s ethical trade manager Rachel Wilshaw said: “It is crucial that any new initiative matches the standards of the Fairtrade Foundation or builds on them, and is transparent and accountable. This is not currently clear and we hope Sainsbury’s will quickly provide clarification.

“Oxfam is concerned that Sainsbury’s plan may fall short in tackling the deep-rooted issues that leave thousands of people earning too little to escape poverty. In particular we would like small-scale producers supplying Sainsbury’s to continue to decide for themselves how money raised through the scheme will be spent on improvements in their community.”

But Sainsbury’s defended its Fairly Traded scheme and insisted no farmers would lose out as it would match Fairtrade’s minimum price for tea as well as the premium.

It said the program will help farmers access new markets, and shield their businesses from global competition, political upheaval, and the threat of climate change.

Sainsbury’s started selling boxes of its Fairly Traded Red Label Tea this month, with will the distinctive Fairtrade Foundation’s label removed from its packaging.

Sources: Belfast Telegraph, the Mirror, MSN, Fairtrade