DEBATE PACK Number CDP 2018/0275, 14 December 2018

Traidcraft and the future By Gloria Tyler, Olivia Phelan, Dominic Webb

of fair trade

Contents

Westminster Hall, Tuesday 18 1. Background 2 2. Press Articles 4 December 2018, 9.30am 3. Parliamentary material 7 There will be a general debate on Traidcraft and the future of fair trade held in 3.1 Debates 7 Westminster Hall on 18 December 2018 at 9.30am. The debate has been 3.2 Written evidence 7 sponsored by Liz Twist MP. 3.3 Written questions 7 4. Further Reading 13

The House of Commons Library prepares a briefing in hard copy and/or online for most non-legislative debates in the Chamber and Westminster Hall other than half-hour debates. Debate Packs are produced quickly after the announcement of parliamentary business. They are intended to provide a summary or overview of the issue being debated and identify relevant briefings and useful documents, including press and parliamentary material. More detailed briefing can be prepared for Members on request to the Library.

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1. Background

The Fairtrade Foundation provides the following definition of fairtrade: Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices (which must never fall lower than the market price), Fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. It enables them to improve their position and have more control over their lives. There are differing estimates of the size of the Fairtrade market in the UK. Market research firm Kantar put the value of the fairtrade market in the UK at over £800 million. Sainsbury’s accounts for over a quarter of the market and the Co-op accounts for nearly a fifth. The Fairtrade Foundation estimated that the market was worth £1.6 billion in 2012. Traidcraft is a fair trade organisation which aims to help people in developing countries. It was founded in 1979 and co-founded the Fairtrade Foundation in 1992. The Fairtrade Foundation is a non-profit organisation which licenses use of the FAIRTRADE Mark on products in the UK in accordance with internationally agreed Fairtrade standards. Traidcraft sells a range of fairtrade products such as tea, coffee and chocolate. These are sourced from a number of countries in Africa, Asia, Central and South America. Traidcraft sells through a network of over 4,000 Fair Traders (often through churches) and online. Traidcraft plc had a turnover of around £10 million in the year to March 2018, down from £16.5 million in 2010. Around half comes from the Fair Traders. In September, Traidcraft plc announced that it might have to cease trading by the end of 2018. The BBC reported that the company made a loss of £500,000 last year. Traidcraft’s financial situation has been adversely affected by the fall in the pound after the EU referendum. Robin Roth, Traidcraft’s chief executive, told the BBC that as the company paid for its products in dollars, it had suffered a loss of nearly a third of a million pounds, as a result of the pound’s depreciation. A disappointing online relaunch also contributed to the financial problems. According to an article in the Guardian, the company has also been affected by declining church attendances and the wider availability of fair trade products through supermarkets. In November, the Traidcraft Board announced a plan to slim down the company. This “will maximise the profitable parts of the business, phase out loss-making lines, create a membership culture and set a new high bar for ethical trading in the UK.” The plans involve Traidcraft offering a

Traidcraft and the future of fair trade 3

simpler range of products. Core grocery lines will be established and fewer craft lines will be offered. Traidcraft’s 4,300 Fair Traders will still be able to access the new version of the company. Traidcraft products will also be available online and by mail order. Under these plans, 12 people will be employed and existing staff would be able to apply for these jobs. 10 additional staff will stay on an extended contract for a transitionary period. Traidcraft previously employed nearly 70 staff. 4 Number CDP 2018/0275, 14 December 2018

2. Press Articles

Traidcraft Traidcraft eyes young ethical consumers with rescue plan Zoe Wood The Guardian, 5 November 2018

Fair trade pioneer Traidcraft saved from closure, though 50 jobs will be lost Graeme Whitfield Chronicle Live, 5 November 2018

Is this the end of the road for Traidcraft?

Jon Douglas

BBC News, 4 October 2018

British companies should be accountable at home for harm caused abroad Liz May, Traidcraft The Financial Times, 8 December 2015

Fairtrade Fairtrade ready to help food firms move to self-certification Ana Ionova Reuters, 10 October 2018

Tea and chocolate that are being sold as ‘Fairtrade’ or ‘Rainforest Certified’ products are often produced by forced labour, new report claims Colin Fernandez Daily Mail, 2 June 2018

Customers likely to confuse Sainsbury’s own-brand tea with Fairtrade, says ASA Ben Chapman Independent, 7 March 2018

Traidcraft and the future of fair trade 5

Young consumers drive shift to ethical products Alice Hancock The Financial Times, 23 December 2017

Millennial coffee drinkers wants farmers appropriately rewarded Rupert Steiner Financial Times, 24 September 2017

Green and Black’s new logo shows Fairtrade is under threat. But we still need it Lucy Siegle The Guardian, 7 August 2017

Fairtrade only really benefits supermarkets. A rethink is needed Ndongo Samba Sylla The Guardian, 4 Aug 2017

Green & Black’s new UK chocolate bar will be neither organic nor Fairtrade Rebecca Smithers The Guardian, 3 August 2017

Move by UK supermarkets threatens to bring Fairtrade crashing down John Vidal The Guardian, 25 June 2017

Why small producers have big concerns about multinationals joining Fairtrade Agatha Herman Independent, 20 May 2017

Cadbury cocoa plan raises questions for future of Fairtrade Hannah Murphy Financial Times, 28 November 2016

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Mind the fair trade gap Tim Harford Financial Times, 29 May 2015 Traidcraft and the future of fair trade 7

3. Parliamentary material 3.1 Debates Fairly Traded Goods HC Deb 07 March 2018 c150WH-c156WH

Trade Bill Second Reading, 09 January 2018 c266-c267

3.2 Written evidence Fairtrade Foundation input to the Public Bill Committee considering the Trade Bill Submitted by the Fairtrade Foundation TB04, January 2018

3.3 Written questions Department for International Trade: Cocoa: Fairtrade Initiative: 160745 Asked by Jim Shannon (Strangford) Asked on 4 July 2018 To ask the Secretary of State for International Trade, what discussions he has had with representatives of Governments of cocoa producing countries on the introduction of fair trade policies for cocoa producers. Answered by George Hollingbery Answered on 12 July 2018 The UK remains committed to free and fair trade, and using trade to promote global development and poverty reduction. As the UK leaves the European Union, our first priority is to ensure continuity in our trading relationships, including cocoa producers. This includes discussions with the likes of Ghana and Cote d’Ivoire about replicating the effects of the EU’s Economic Partnership Agreements (EPAs) to continue to provide duty-free access to the UK for products including cocoa. The Government has also committed to continue to unilaterally provide preferential market access to around 70 other developing countries including some that produce cocoa. In the future, we will look to further deepen our trading relationships with these partners.

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House of Commons Commission: Fairtrade Initiative: 122008 Asked by Dr David Drew Asked on 10 January 2018 To ask the right hon. Member for Carshalton and Wallington, representing the House of Commons Commission, what plans Parliament has to recognise Fair Trade Fortnight. Answered by Tom Brake Answered on 23 January 2018 The Houses of Parliament have for many years recognised and supported Fair Trade Fortnight. Catering customers are made aware of Fair Trade Fortnight through promotional screens and posters in the catering venues. In addition, members of the Catering Team speak to interested customers at their tables about the Fair Trade organisation during the fortnight. The House Service sources products that meet UK or equivalent standards of production, and considers purchasing Fairly Traded products where there is a competitive market. Since 1997, all coffee sold in catering outlets has been Fairtrade. Fairtrade products, including a variety of popular drinks and snacks labelled with the Fairtrade mark, are also sold by Catering Services in Parliament. Additionally, Parliament’s bottled water supplier is a social enterprise that donates proceeds to Water Aid.

Department for International Trade: Developing Countries: Sustainable Development: 118622 Asked by Bill Esterson Asked on 11 December 2017 To ask the Secretary of State for International Trade, what representations he has received from the Fairtrade Foundation on the effect on the UK's Sustainable Development Goals of the provisions in his Department's Trade Bill, published in November 2017; and what assessment he has made of that effect. Answered by Greg Hands Answered on 19 December 2017 Ministers and officials at the Department of International Trade (DIT) regularly meet with a wide range of stakeholders, including the Fairtrade Foundation. The UK is a leading voice in support of free trade as a tool for economic development and a proud advocate of helping developing countries trade their way out of poverty. That is why DIT and the Department for International Development (DFID) are working together to ensure development and global prosperity are at the heart of UK trade and investment policy. Traidcraft and the future of fair trade 9

We have pledged to support the world’s poorest countries access UK markets once we leave the EU, to help fulfil our commitment to deliver the UN Sustainable Development Goals, both at home and around the world.

Department for International Trade: Fairtrade Initiative: 117056 Asked by Dr David Drew Asked on 1 December 2017 To ask the Secretary of State for International Development, what plans she has to increase awareness of the Fairtrade Mark. Answered by Greg Hands Answered on 7 December 2017 The UK Government is a long-term partner of the Fairtrade movement, which plays a crucial role in helping producers around the world improve their lives. DFID is currently supporting the pilot of Fairtrace, a supply chain mapping programme run with Fairtrade’s supply chain assurance partner. This work will help Fairtrade continue to ensure that farmers receive fair prices for their products, that workers receive better wages, and that agricultural practices are more sustainable.

Department for International Trade: Fairtrade Initiative: 3300 Asked by Gareth Thomas Asked on 6 July 2017 To ask the Secretary of State for International Development, if she will make an assessment on the effect on the Fairtrade scheme of the decision of Sainsbury's and other retailers to withdraw from that scheme; and if she will make a statement. Answered by Greg Hands Answered on 7 December 2017 DFID is a longstanding supporter of Fairtrade and other standards organisations which fall under the International Social and Environmental Accreditation and Labelling (ISEAL) Alliance umbrella. Certification by these organisations assures consumers that standards are being met and can help producers receive a better price for their goods. There is not yet sufficient information available on the Sainsbury’s Sustainability Standards for DFID to make an assessment. Officials will monitor the progress of the scheme, including its impact on Fairtrade.

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Department for International Trade: Fairtrade Initiative: 1632 Asked by Gareth Thomas (Harrow West) Asked on 28 June 2017 To ask the Secretary of State for International Trade, what assessment he has made of the value of the Fairtrade scheme in potential future trading deals with countries outside of the EU; and if he will make a statement. Answered by Greg Hands Answered on 6 July 2017 The UK has a strong history of promoting our values globally, including longstanding support for Fairtrade. We will in due course consider all options in the design of future bilateral trade and investment agreements. We are committed to ensuring that when companies source from developing countries, they do so in a way which protects the human rights of workers and their health and safety.

Department for International Trade: Fairtrade Initiative: 1428 Asked by Catherine McKinnell (Newcastle upon Tyne North) Asked on 27 June 2017 To ask the Secretary of State for International Development, what recent assessment she has made of the benefits of Fairtrade certification for producers in developing countries. Answered by Greg Hands Answered on 3 July 2017 DFID is long standing supporter of Fairtrade. Fairtrade plays an important role in helping producers around the world improve their lives in a sustainable way; ensuring farmers receive fair prices for their products, workers receive better wages and by making agricultural practices more sustainable. Fairtrade provides a minimum price for sales, as well as a premium, and certifies smallholder and plantation supply chains, as well as extractives such as gold. Producers received an estimated £123 million premium as a result of being part of a Fairtrade supply chain in 2015.

Department for International Trade: Fairtrade Initiative: 1227 Asked by Tonia Antoniazzi (Gower) Asked on 26 June 2017 To ask the Secretary of State for International Development, what the Government's policy is on Fairtrade certification. Answered by Alastair Burt Answered on 3 July 2017 Traidcraft and the future of fair trade 11

The UK government is a strong supporter of Fairtrade. From 2010 to 2016, DFID provided £18 million to Fairtrade International to support their work and strengthen the global Fairtrade system. This includes Fairtrade producer and worker organizations that contribute to inclusive economic, environmental and social development in their communities around the world. DFID continues to actively engage with Fairtrade on a variety of projects and campaigns, such as supporting the pilot of Fairtrace, a technology based supply chain mapping programme run with Fairtrade’s supply chain assurance partner, FLOCERT.

Department for International Trade: Developing Countries: manufactured Goods: 68475 Asked by Mr Nigel Evans (Ribble Valley) Asked on 20 March 2017 To ask the Secretary of State for International Development, whether her Department plans to use some of the UK's aid budget to support the creation of processing plants to allow start-to-finish manufacture of chocolate and coffee in countries that provide the base products for fair-trade food items. Answered by Rory Stewart Answered on 27 March 2017 The UK currently invests in supply chains through programmes like the Africa Enterprise Challenge Fund and the Global Agriculture and Food Security Programme. Support for in-country processing of basic commodities is a way to add value and support livelihoods in developing countries. In the Economic Development Strategy launched in January 2017, DfID committed to take an increasingly dynamic approach to agriculture, including boosting agri-business and financing agricultural infrastructure, to provide strong foundations for inclusive growth. The specific support we provide to different countries and sectors will be tailored to local needs and priorities.

Department for International Trade: Fairtrade Initiative: 62827 Asked by Mr Barry Sheerman (Huddersfield) Asked on 2 February 2017 To ask the Secretary of State for Environment, Food and Rural Affairs, if the Government will take steps to encourage more consumers to buy Fairtrade produce. Answered by Gregory Eustice Answered on 8 February 2017 The Government is committed to supporting Fairtrade around the world. Over the last six years, the Department for International 12 Number CDP 2018/0275, 14 December 2018

Development (DfID) has provided £18 million to Fairtrade International to support their work and strengthen the global Fairtrade system. This includes Fairtrade producer and worker organisations that are the drivers of inclusive economic, environmental and social development in their communities around the world. DfID continues to actively engage with Fairtrade on a variety of projects and campaigns, such as the forthcoming Fairtrade Fortnight from 27 February to 12 March.

Department for International Trade: Fairtrade Initiative: 54698 Asked by Margaret Ferrier (Rutherglen and Hamilton West) Asked on 24 November 2016 To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent steps he has taken to encourage retailers to stock more Fairtrade products and adopt Fairtrade principles. Answered by Margot James Answered on 2 December 2016 The stocking of Fairtrade products and the adoption of Fairtrade principles by retailers are commercial matters for the companies concerned. The Government is committed to supporting Fairtrade around the world. Over the last six years, the Department for International Development (DFID) has provided £18m to Fairtrade International to support their work and strengthen the global Fairtrade system. This includes Fairtrade producer and worker organizations that are the drivers of inclusive economic, environmental and social development in their communities around the world. DFID continues to actively engage with Fairtrade on a variety of projects and campaigns, such as the upcoming Fairtrade Fortnight.

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4. Further Reading

Delivering a ‘Fairtrade Brexit’? Fairtrade, September 2018

The Global Business of Forced Labour Sheffield Political Economy Research Institute, University of Sheffield, June 2018

Annual Report and Financial Statements for the year ended 31 December 2017 Fairtrade Foundation

Annual Report 2017 World Fair Trade Organisation

Briefing – Trade and Customs Bills, 2nd Reading Fairtrade Foundation

Assessing the Impact of Fairtrade on Poverty Reduction through Rural Development Centre for Evaluation, Saarland University

Fair Trade Market in Scotland Report 2018 Scottish Fair Trade Forum

Does Fair Trade contribute to sustainable development? European Parliament Library Briefing, November 2014

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