Perceptions on Fairtrade Certification: a Cross-Sectional Analysis of Perceptions on Fairtrade Certification Along the Global Value Chain of South African Wine

Perceptions on Fairtrade Certification: A cross-sectional analysis of perceptions on Fairtrade certification along the global value chain of South African wine

Max Lawaly Kuipers Student number: 11041587 [email protected]

Bachelor thesis for Human Geography and Urban Planning Subject: Economic Geography of Outsourcing Specialization: International Development Studies

Supervisor: dr. Jeroen Merk Second reader: Maarten Bavinck

Date: 18 June 2018 Word count: 21.791

Table of Contents

Table of Contents 2 List of abbreviations 3

Introduction 4 ● What is Fairtrade certification? 5 ● A brief historical context of the South African wine industry 5 ● Aim of this thesis 7

Theoretical framework 8 ● Fair trade and Fairtrade (FT) 8 ● World Systems Theory (WST) and the Global Value Chain (GVC) approach 8

Methodology 12 ● Methods 12 ● Measuring perceptions on Fairtrade certification 13 ● Implications on findings due to applied research design and sampling methods 15

1. Perceptions on Fairtrade - Max Havelaar and Fairtrade International 17 ● Fairtrade certification as described by Max Havelaar and Fairtrade International 17 ● Max Havelaar- and Fairtrade International’s perceptions on Fairtrade certification 19

2. Consumer perceptions on Fairtrade certification 21 ● Employee level 21 ● Enterprise level 21 ● Regional and/or national level 23 ● Consumer level 25 ● Consumer perceptions on Fairtrade certification 27

3. General retailers’ perceptions on Fairtrade certification 28 ● Employee level 28 ● Enterprise level 28 ● Regional and/or national level 29 ● Consumer level 30

4. FT specialised retailers’ perception on Fairtrade certification 32 ● Employee level 32

● Enterprise level 33 ● Regional and/or national level 34 ● Consumer level 34 ● Perceptions on Fairtrade certification of general and FT specialised retailers 36

5. Horizontal dimensions of power - the Dutch NGO workers and the Fairtrade authority 37 ● Employee level 37 ● Enterprise level 38 ● Regional and/or national level 41 ● Consumer level 42 ● Perceptions of horizontal dimensions of power on Fairtrade certification 43

6. Case study: Perceptions on Fairtrade certification in South Africa’s Western Cape 45 ● Horizontal dimensions of power - South African NGO workers 45 ● Enterprise level - the winery owner 48

7. Comparing perceptions on Fairtrade certification 52 ● Perceptions of Fairtrade institutions compared with consumers 52 ● Perceptions on the Dutch side of the GVC compared 54 ● Comparing perceptions on both sides of the GVC 56

Conclusion and recommendations 58

Bibliography 60

Appendix 65 ● Figure 1 - Simplified representation of the Global Value Chain for wine 66 ● Figure 2 - Visualisation of the main research question and sub-questions 67 ● Figure 3 - Visualisation of operationalisation of perception 68 ● Figure 4 - Item lust 69 ● Figure 5 - Perception-Comparison tables 70

List of abbreviations

EJN: Economic Justice Network FT: Fairtrade FTI: Fairtrade International

GVC: Global Value Chain MH: Max Havelaar WST: World Systems Theory

Introduction

Fairtrade certified products and labels have become part of many stores assortments in the Western world. Everyday products like chocolate, coffee and tea, and in some cases even gold now boast a Fairtrade certificate. In the Netherlands, the Max Havelaar Foundation Netherlands in cooperation with Fairtrade International also increasingly advertise their logo and products in the shoppers eye. While glancing through recent news, it becomes clear that not all is straightforward in the world of Fairtrade certification. Headers such as “Fairtrade only really benefits supermarkets. A rethink is needed” (Sylla, 2017) and “Max Havelaar 1 farmers do not receive extra benefits ”(Novum, 2012) are showing that Fairtrade certification and its effects are a contentious subject. Despite this negative media attention, the share of Fairtrade certified products sold in 2016 grew with 14% with the amount of Fairtrade-premiums, raised through Max Havelaar certification, sent back to farmers cooperatives reaching 7,8 million euros (Max Havelaar 2016). The Max Havelaar Foundation, on its website, also shares many success stories related to the implementation of Fairtrade certified products. In describing the benefits of their certificate for affiliated farmers and producers, Max Havelaar displays several farmers stories which contain utterances such as “Fairtrade has helped me and my family to become more 2 3 independent” and “Thanks to the Fairtrade premium, I can produce more and better sugar” (Max Havelaar, 2018c-d). However, are these discourses and perspectives on Fairtrade similarly understood by consumers and other actors in the value chain, and do they truly symbolise ‘fairer’ trade for the intended beneficiaries? This bachelor thesis is geared towards the creation of better insights in discourses and perspectives of different actors involved in the global value chain (GVC) of South African

1 Original text in Dutch: “Max Havelaarboeren ontvangen geen extratje” 2 Freely translated from Dutch: “Fairtrade heeft mij en mijn familie geholpen om onafhankelijker te worden” 3 Freely translated from Dutch: “Dankzij de Fairtrade premie kan ik meer en betere suiker verbouwen”

Fairtrade (FT) certified wines. This thesis strives to uncover differences and similarities between the aforementioned perceptions of actors involved and compare them to perceptions put forward by the Max Havelaar Foundation Netherlands and Fairtrade International (FTI). The main research question is formulated as follows: How do perceptions on and discourses about Max Havelaar and Fairtrade certification, of actors involved in the global value chain of Fairtrade wine compare to each other?

What is Fairtrade certification? The Max Havelaar Foundation (Fairtrade Netherlands) is an “...independent non-profit organization that licenses use of the Fairtrade Certification Mark on products in the Netherlands in accordance with internationally agreed Fairtrade standards”, (Max Havelaar, 2018-a). The organization furthermore describes that it assists farmers and labourers in acquiring a better position in the trade-chain to improve their lives and helps them invest into a sustainable future. This is, according to Max Havelaar (2018-b), achieved through, among other things, stimulating cooperation between farmers and labourers, trading under fair and sustainable conditions and guaranteeing a minimum price.

A brief historical context of the South African wine industry As mentioned, this bachelor thesis deals with perceptions on FT certification of actors involved in the value chain of from South Africa originating wines. For better understanding of the context wherein these wines are produced and the role FT certification plays within it, a brief outline of the history and the present state of South Africa's wine industry and the context wherein MH and FTI operate in relation to FT certified wines is outlined. Heemstede (2013, p.27), in his thesis concerning empowerment of farm workers in the South African wine industry, divides the historical development of the wine industry in three distinct time periods, namely slavery era, the period from the emancipation of slavery until the ending of Apartheid and the post-apartheid era. During the slavery era up till 1834, labour relations on wine farms were characterized by white wine farm owners using black slaves for the labour intensive production of agricultural products, among which wine (Heemstede, 2013, p.28). Slaves, for subsistence, where fully dependent on the farm and its owners whereby farmers were in full control of labour relations and was “...responsible for the behaviour of his slaves who were also seen as

his infant children” (Heemstede, 2013, p.28-29). After the abolition of slavery in 1834 and the ending of apartheid, farmers had to pay their former slaves for their labour however this was, within a few years, overturned by the introduction and implementation of, among other things, the ‘dop stelsel’ or ‘tot system’. The ‘tot system’ “...provided labourers with (daily) rations of wine in lieu of wages creating a docile, alcoholic (and as such less productive) labour force.” and kept employees, through the feeding of addiction, indebtedness as a result of addiction and lack of employment outside of farms, from seeking employment elsewhere (Heemstede, 2013, p.29). Employees and their families lived on their premises. It is described how the plight of farm employees, in the years up to the abolishment of apartheid, as a result of national and international pressure slightly improved with employees enjoying improvements in employer provided housing and the provision tv rooms and creches (Heemstede, 2013, p.31). The post-apartheid era, running from the ending of apartheid in 1994 up to the present day, is characterised by high numbers of unemployment and job seekers accompanied by marginalization of non-permanent employees, distrust of employees towards workers unions. Because of the large amounts of surplus employees “...farmers or labour brokers can simply drive their bakkie (truck) to a street corner and ask who is willing to work that day for a certain amount” which in turn, because of wide availability of labour, presses wages, makes workers un-eligible for benefits such as farm housing and insurance and makes employees vulnerable to exploitation by employers (Heemstede, 2013, p.32). Heemstede (2013) furthermore describes that, as a result of lifting of an international boycott imposed as a sanction for the maintenance of the apartheid system, the ending of Apartheid served as a significant stimulance for the South African wine industry. According to Wines of South Africa (WOSA) (N.N.), a ‘not-for-profit’ industry organisation concerned with the promotion of exports of South African wine, the contemporary South African wine industry developed itself considerably in size growing to become the seventh largest exporter of wine globally in 2017 “...with exports reaching 228.5 million litres in 2017”. The industry consists of 3029 farmers, directly or indirectly employing about 300.000 people, that cultivate over 94.545 hectares of South African land. The increase in demand for SA wine of abroad markets came accompanied by a demand for higher quality wine which simultaneously required better skilled employees (Heemstede, 2013, p.34). However, as described by Herman (2012), “despite South Africa’s democratic transition … and continuing process of national reconciliation, the

marginalisation of the historically excluded black majority remains highly visible” (Herman, 2012, p.123). In turn, Heemstede (2013), described demand for increased quality led to an increase in employees benefiting from permanent job appointment, training and other benefits that, come forth out of investments made by farmers into their enterprise. Despite all the above, Heemstede (2013), states that within the South African wine industry “...a growing range of alternative and progressive initiatives have been established to try and address…” the plight of wine farm employees. These initiatives such as, the local, Wine Industry Ethical Trade Association (WIETA) and the, internationally orientated, Fairtrade certification schemes “...while perhaps limited in their effect”, do attempt to better the industry and the livelihoods of those dependent on it.

Aim of this thesis The aim of this thesis is to generate greater insight in what perceptions and discourses exists with actors along the global value chain of Western Cape wines. The results and conclusions of this thesis can inspire further research concerned with the workings, effects and other dynamics between different actors involved with(in) Fairtrade certification. Furthermore, it is hoped that since Fairtrade certification functions on buyer-driven goodwill for success, more insight in perceptions of actors on both sides of the global value chain can inform and motivate policymakers, producers, retailers, advocacy groups, institutions and the general public to continue their support and actions towards ‘fairer’ Fairtrade- and general- international trade relations. This thesis will elaborate on the theoretical concepts that were used to frame the narrative of this research, after which the main research question and the corresponding sub-questions are elaborated and a hypothesis is formulated. This is followed by a description of the used research methods and the implications of the chosen research design and sampling methods on the outcomes of this study. In the results chapters, all perceptions of involved actors will be elaborated and compared. This will be followed with a conclusion and a discussion.

Theoretical Framework

Fair trade and Fairtrade (FT) Troulis (2016), in his thesis about the effects of Fairtrade (FT) certification and power relations existing within contemporary trading systems, distinguishes fair trade and Fairtrade in the following manner. The difference between fair trade and Fairtrade lies in the given that the former, fair trade in two words, refers to “…the fair trade movement as a whole and the organisations that are part of it, including both labelled and unlabelled goods”, while the latter, Fairtrade in one word, refers to “...the certification and labelling system governed by Fairtrade International (FTI)”, (Troulis, 2016, p.13), the same umbrella organisation under which the Max Havelaar Foundation resides. Troulis (2016) furthermore adds that, according to him, FT certification, as propounded by Fairtrade International and enterprises that carry and sell the Fairtrade-label, is “driven by profit, brand reputation, differentiation [and] addressing customers…” where after the author adds that Fairtrade certification is there to “...to entice a segment of ‘ethical’ shoppers to buy certified products”, (Troulis, 2016, p.263).

World Systems Theory (WST) and the Global Value Chain (GVC) approach International trade, international labour relations and possible development are often intertwined with each other. In order to analyse these relationships in our globalised world, the world systems theory, as developed by Wallerstein (1995), envisages our contemporary

world as structured along the lines of the core-periphery model. The world-system came into existence as a result of the global institutionalisation of capitalism and resulted in “...the only world-economy indeed the only world-system, that has ever succeeded in expanding its outer boundaries to encompass the entire globe”, (Wallerstein, 1995, p.629). According to Wallerstein (1995) commodity chains, which refer to modes of production wherein stages of production are dispersed instead of concentrated within one factory, unit or geographical area, have been the “...integument of capitalist production processes from the outset” and has permitted researchers, scholars and others to “...describe the axial division of labour as a core/periphery phenomenon in which unequal exchange is a major mechanism of surplus transfer and concentration” (Wallerstein, 1995, p.632-633). The concept of the Global Value Chain (GVC) stems from the previously described concept of commodity chains, as described by Wallerstein (1995), and is a more contemporary view on core-periphery relationships wherein transnational corporations have replaced, or at least altered, the position of core- countries. Approaching trade relations through a GVC lens entails approaching trade relations as “...being embedded in, and considerably determined by institutional structures…” and considering “...activities such as design, production, marketing, distribution and support to the final consumer.” as part of these relations (Troulis, 2016, p.44). Troulis (2016) and Gereffi (1994b), make a distinction between ‘producer-’ and ‘consumer-’ driven chains. A ‘producer-driven’ chain is a value chain wherein a transnational corporation or producer of a certain good, such as large car- or electronics- manufacturers, has a central role in controlling the production system (Troulis, 2016, p.47-48). In buyer-driven chains “...large retailers, brand-named merchandisers, and trading companies…” have the greatest influence on the management of the GVC and are responsible for setting up “...decentralised production networks in a variety of exporting countries, typically located in the Third World”, (Gereffi, 1994b, p.98). Generally, products emanating from these chains are produced and ‘finished’ within these countries, after which they are exported, whereby, for example, design-, production- and quality- specifications are dictated by the ‘buying’ parties (Gereffi, 1994b, p.98-99). However, are we, in the context of South African wine exported to the Netherlands, dealing with a producer- or buyer-driven GVC? Who benefits from the international value chain and who does not? As described by (Ponte, 2007), in his paper concerned with

governance in and of the South African wine value chain, identifying South African wine exports as producer- or buyer-driven is not straight forward and, among other things, also depends on towards what country, with its respective rules, culture, preferences and consumers- and buyer-preferences, the wine is exported. In the context of the Netherlands, the research by Ponte (2007) emphasises that, Dutch “...consumers buy wine mostly on the basis of price, in combination with image/packaging style and the reputation of the country as a whole”, (Ponte, 2007, p.28). The actors in this research are active on two sides of the GVC, in this thesis mentioned as “both sides”, namely the importing country (in this research the Dutch/consumption side of the GVC) and South Africa (in this research the South African/production side of the GVC). For a simplified representation of the GVC, see figure 1 in the appendix. Other actors involved in the producer- or buyer- ‘drivenness’ of GVC’s are also of influence on the procedures and proceedings within a GVC. As described by Troulis (2016) “...external actors (those not directly supplying a product or service)...” such as governments, civil society organisations, NGOs and institutions such as FT International and Max Havelaar can influence aspects related to the functioning of a GVC (Troulis, 2016, p.15). These actors are termed Troulis (2016) termed, horizontal dimension of power (Troulis, 2016; Raynolds, 2012). Raynolds (2012), in her article discussing social dimensions affecting Fair Trade, posits that Fair Trade initiatives should be seen as forms of “social regulations” since they are influenced not only by corporate and state initiated regulations but are also subject to perceptions, preferences and ethical considerations of individual and collective actors”. According to the author, institutional arrangements such as FT “... operate beyond the traditional bounds of private (ie. corporate) and public (ie. state) domains and are animated by individual and collective (ie. private and public) actors and actions”, (Raynolds, 2012, p.276). From a Polanyian perspective, which emphasises that social dimensions are of influence on consumption and production patterns, the author posits that consumers of-, as well as advocacy groups for-, Fair trade and FT-certified products have a strong influence on how Fair Trade arrangements, certification and other related phenomena take shape. According to Raynolds (2012), FT-consumers in some cases may imagine themselves as part of an ‘imagined community’ of ‘global citizens’ and or ‘citizen consumers’. The ‘imagined community’ of ‘global citizens’ stems from FT-consumers aligning themselves, in perception and discourse, with producers while the identity of ‘citizen consumers’ comes forth from

FT/ethical consumers aligning their views with other ethical consumers (Raynolds, 2012, p.281). Furthermore, Raynolds (2012), describes how Fair Trade groups, such as FT International and the Max Havelaar Foundation, “...deploy information on ethical consumption to both mobilise supporters and justify their cause…” (Raynolds, 2012, p.281), which points towards the influential power of such institutions on public perceptions. Herman (2012), in her article analysing discourses of actors involved in the GVC of FT certified wine imported from South Africa to the United Kingdom, shows how discourses about FT certification and its effects are flexible and adaptable to seem appealing to producers, retailers and consumers across the consumption-production network. Herman (2012) shows that these discourses are altered and adapted in a tactical manner to not only fit international views on Fairtrade but also the local ones. “Ethical discourses emerged as tactical, ‘knowing’ and highly dependent on context with their network sustainability dependent on a relational (im)mutability of meaning”, (Herman, 2012, p.1129). Although the effects of Fairtrade certification are diverse and deserve broad academic attention, this thesis is focused on differences in perceptions and discourse about FT- and Max Havelaar certification, its effects on the formulation of FT-objectives by involved institutions and how these perceptions and discourses compare to one another. Partially in line with the discourses of Troulis (2016) and Herman (2012) and by partially challenging the perceptions by Raynolds (2012), with regard to the influence of FT wine consumers and advocacy groups, the following overarching research question was formulated:

RQ: How do perceptions on Fairtrade certification, of actors involved in the global value chain of Fairtrade wine, relate to- and compare to each other?

To answer this overarching research question the following sub-questions where formulated: - What does the Max Havelaar Foundation Netherlands/FTI certificate entail according to the organisations promotional materials such as websites and online videos? - How do perceptions and discourses on Fairtrade certification, and more specifically Max Havelaar certification, take shape among actors involved with Western Cape wine on the Dutch side of the global value chain, namely Fairtrade wine consumers and retailers?

- How do perceptions and discourses on Fairtrade certification, take shape among actors involved with Western Cape wine on the South African side of the GVC, namely winery owners? - How do perceptions with actors in the horizontal dimensions of power, namely NGOs and advocacy groups, take shape on both sides of the GVC?

A visualization of the research questions if visible in figure 2, residing in the appendix. In relation to the formulated research question and sub-questions, the following hypothesis is formulated. It is hypothesised that there exists a ‘mismatch’ between perceptions surrounding FT-certified products residing with FT institutions, general consumers and retailers, owners of wineries and involved NGOs.

Methodology

Methods The methodology used for this thesis research, data collection and analyses is of qualitative nature utilising a cross-sectional research design with case study elements (Bryman, 2012, p.69). The conducted research consisted of desk research combined with semi-structured interviews. The majority of the research, the desk research and the majority of the interviews, took place in the Netherlands. A smaller, but not less significant, portion of the research took place in South Africa’s Western Cape region from May 6-17, 2018. The desk research consisted of a narrative literary review (Bryman, 2012, p.102), of promotional materials and policy documents derived from the Max Havelaar Foundation Netherlands and Fairtrade International, as well as the for the subject relevant literature acquired from the University of Amsterdam library, Google Scholar, news-websites and other media of relevant actors and institutions. Through the described desk research the sub questions, in relation to perceptions residing with, among others, FT institutions and

consumers and the comparison between different perceptions and discourses, will be answered. The conducted interviews were of semi-structured (Bryman, 2012, p.471) nature and were conducted with relevant actors, namely consumers of Fairtrade products and or Fairtrade Western Cape wines, retailers of Fairtrade products and or Fairtrade Western Cape wines, producers of Fairtrade products and or Fairtrade Western Cape wines and NGOs involved with the Max Havelaar Foundation Netherlands, Fairtrade International and Western Cape wine production. Interviews were audio recorded with consent and followed the structure of a pre-assembled item list which will be discussed later in this chapter. The audio recordings were transcribed and anonymised. The selection of relevant actors with whom the semi-structured interviews would be conducted, the method of purposive sampling was applied. The purposive sampling consisted of sampling of context (Bryman, 2012, p. 416-417), which relates to the selection and demarcation of a specific research-area based on certain characteristics such as the presence of FT-wine producers. Moreover, sampling of participants relates to who, within a chosen context, will be selected to participate in the research (Bryman, 2012, p.417), such as FT-wine producers that boast FT certification, was applied. Besides the previously described methods, a method of snowballing (Bryman, 2012, p.424) was applied to increase the likelihood that relevant actors would be found and would be willing to participate in the research and to possibly get in contact with actors that might have been overlooked during the selection of possibly relevant actors. The ‘relevance’ of the different actors was based upon their connection with or involvement in the GVC of FT certified wines, and more specifically wines originating from the Western Cape region in South Africa. Although the above described, and applied, methods of sampling and acquisition of relevant actors for the conduction of interviews was similar across the contexts of the Netherlands and the Western Cape, the acquisition of relevant interviewees in South Africa relied more heavily on the snowballing method because of the limited time frame wherein the research in South Africa was conducted. The earlier mentioned context wherein the research took place was partially in the Netherlands and partially in South Africa. The Dutch context was not place-bound, besides that it took place within the Netherlands, but took form in desk research and the conduction of semi-structured interviews. The South African context chosen for this research is located

in the South African province of the Western Cape since the Western Cape harbours the majority of wine-related activities across the country and many FT certified wines that are sold in the Netherlands originate from there.

Measuring perceptions on Fairtrade certification As mentioned earlier, the conducted thesis research was aimed at the comparison of perceptions of different actors along the GVC of FT certified wines originating from South Africa. However, what are perceptions and how can these perceptions be measured and compared? Hofhuis, van der Zee and Otten (2015), in their article concerning the measurement of employee perceptions on the effect of cultural diversity in the workplace, describe the emergence and development of the Benefits and Threats of Diversity Scale (BTDS). BTDS is “an instrument which measures how employees perceive the effects of cultural diversity in the workplace, and is structured on the basis of the dimension ‘benefits’ and the dimension ‘threats’, with their respective subcategories, as perceived by the subjects of the respective research” (Hofhuis, van der Zee & Otten, 2015, p.177). The researchers, during data collection via semi-structured interviews, queried respondents on their views on-, experienced or expected benefits and threats resulting from -and concrete examples of positive and negative related to- cultural diversity in the workplace (Hofhuis, van der Zee & Otten, 2015, p.183). Hofhuis, van der Zee and Otten (2015) operationalised perception as consisting of the two main dimensions, ‘benefits’ and ‘threats’, with their respective sub-dimensions. This thesis research applies a similar, although adapted, manner of operationalisation and measurement of perception on the basis of dimensions. For the purpose of this thesis research, perception was operationalised as consisting of the main dimensions ‘advantages’ and ‘disadvantages’. Both dimensions, in turn, consist of the sub-dimensions advantages/disadvantages- for South African employees, for South African as well as Dutch enterprises (e.g. producers, importers, retailers), for regions and or nations (e.g. economies) and for consumers of FT certified products. A visualisation of the above described operationalisation of perception is visible in figure 3 in the appendix. On the basis of the previously described operationalisation of perception, item lists for the conducted

semi-structured interviews were constructed. An example of a used item list can be found in the appendix, figure 4. After the data, in the form of audio recordings of conducted interviews, was acquired it was analysed using a similar approach as described by Burnard (1991). Following the methods described by Burnard (1991), the transcribed interviews were categorised, refined and analysed through a method of open coding and recoding. Using the software program Atlas.ti, which allows researchers to easily categorise, code, re-code and compile excerpts, the acquired examples of advantages and disadvantages felt affecting actors on different scales, were categorised and compiled. During this process it was attempted to avoid the negative effects caused by research bias (Burnard, 1991, p.463) by, on multiple occasions, reviewing and discussing the categorised excerpts with peers. Finally, the coded interview excerpts where compiled, analysed and compared among each other. This thesis has made comparisons between the perceptions on FT certification of the following actors. Firstly, a comparison was made between perceptions residing with FT institutions, namely The Max Havelaar Foundation Netherlands and Fairtrade International, and those residing with consumers of FT certified products and specifically FT certified wine. Secondly, a comparison was made between perceptions residing with the aforementioned FT institutions and perceptions residing with other actors on the Dutch side of the GVC, namely retailers and the so called horizontal dimensions of power. Lastly, a comparison was made between perceptions of actors on the Dutch side of the GVC and those residing on the South African side of the GVC, namely the perceptions of the South African winery owner and the perceptions of the South African horizontal dimensions of power.

Implications for findings due to applied research-design and sampling-methods The decisions made concerning the application of the previously described research design has, as described by Bryman (2012), implications for how findings and conclusions generated by the conducted research should be understood and evaluated. Since this thesis research is of qualitative nature the concept of trustworthiness, consisting of the criteria credibility, transferability, dependability and confirmability (Bryman, 2012, p.49) was applied for evaluation of the trustworthiness of the research data. In relation to the credibility, concerning the causal relationship between dependent and independent variables (Bryman, 2012, p.49), in this case the effects of public perceptions

on FT certification and vice versa, of results coming out of the thesis research it can beforehand be concluded that the degree of credibility will be weak. This is not seen as problematic since the research, from the outset, focused on investigating “associations”, between perceptions on- and the realities of FT certification, “...rather than findings from which causal inferences can be unambiguously made” (Bryman, 2012, p.60-61). Regarding the transferability, concerning the generalisability beyond the specific context, in this case perceptions of actors involved in and with FT certified South African wine, of the findings produced by this research, (Bryman, 2012, p.47) it was also beforehand concluded that the degree of this measure would be low. Although the findings might not be generalisable to other FT certified wine GVC’s or FT certified products it is hoped that the conclusions and insights from this research will invite other researchers to proceed in further research in other FT GVC’s. To improve the degree of dependability, which relates to reliability or replicability of a study and its results (Bryman, 2012, p.), the following actions will be undertaken. In relation to improving the reliability, which relates to the measures used to compare perceptions and discourses of different actors, this research will meticulously describe and substantiate in which way measures are devised, applied, analysed and written up. To enhance replicability of the intended research, all the steps undertaken, such as the way actors were contacted, addressed and informed, the way new interviewees were found, and item-lists used therein, will be documented and added in the appendix to enable and facilitate peer review. Finally, in relation to the confirmability, concerned with the degree of objectivity with which the research was carried out, it was at all times attempted to refrain from contaminating obtained data with personal presumptions, interpretations or views. Furthermore, in contacting relevant actors for interviews, in the formulation of possible letters and emails, the researcher strived to come across as neutral as possible in order to prevent that interviews were influenced beforehand and would possibly prepare their narrative before the interviews were conducted. Besides the aforementioned, the researcher also refrained from sharing his views upon topic related to the subject matter of the interview until after the interviews were completed.

1. Perceptions on Fairtrade certification - Max Havelaar and Fairtrade International

The following chapter discusses perceptions on FT certification as put forward by the Max Havelaar Foundation Netherlands and Fairtrade International. The perceptions where drawn up using the earlier described method for operationalising perceptions, and is based on

websites and promotional materials, such as videos. The sources contained many examples of advantages, for a range of actors, as a consequence of FT certification. Disadvantages, on the other hand, were more difficult to identify with just a few explicitly mentioned. However, several disadvantages could be deduced from the manner wherein the promotional materials and websites, gave context to the workings and advantages of participation in FT.

Fairtrade certification as described by Max Havelaar and Fairtrade International On the official website of the Max Havelaar Foundation Netherlands, Fairtrade certification, why it's needed, its inner workings and additional advantages are described under the header ‘What is Fairtrade’. Firstly, the page describes the necessity of FT, stating that FT “...aids farmers and labourers in developing countries to acquire a better position within the trade chain, so that they can live of their work and can invest in a sustainable future”, (Max Havelaar, N.N.-a). Furthermore, it is stated that the need for the aforementioned aid stems from inaccessibility for small scale farmers to a steady income, leading to inability to provide for one's family and to invest in the future of one’s enterprise, children and community in Asia, Africa and South America (Max Havelaar, N.N.-a). According to Max Havelaar (N.N.-a), FT is needed for plantation workers because plantation work is characterized by low salaries, bad working conditions and impaired collective bargaining circumstances. As solutions for the above stated needs, the website presents ‘collaboration in cooperatives’ of farmers and ‘honest and sustainable conditions’ for farmers and employees alike, which refers to ‘the minimum price’, ‘the FT premium’ and the ‘social- and environmental criteria’. The advantages of ‘collaboration in cooperatives’ lie in the ability of cooperatives to more easily amass financing for technical and logistical investments which in turn improves ones bargaining position, received price for produces and access to the world markets. Other advantages of collaboration are, as stated on the website, that farmers, because of the collaboration, cannot be played against each other and that cooperative members have access to trainings for, among other things, enhancement of productivity (Max Havelaar, N.N.-b). Max Havelaar (N.N.-b), furthermore, states that “farmers form the backbone of the countryside…” and that their communal influence can positively benefit their region, which signals an advantage on the regional and or national scale. Out of the description of the significance of cooperatives for FT, a disadvantage as a result of FT certification was also

deduced. Collaboration in cooperatives by farmers is, as stated by Max Havelaar (N.N.-a), the most important condition for Fairtrade. Hence, if one is not able or, for any reason, willing to collaborate with others, participation in FT certification is out of the question. The described advantages of ‘honest and sustainable conditions’, consist of minimum price paid by the buying party, FT premiums paid by the buying party on top of the minimum price and the social- and environmental criteria. The guaranteed minimum price “...should enable farmers to cover the costs of sustainable production.” which in turn protects farmers from decreases in global market prices of agricultural products (Max Havelaar, N.N.-a). The FT premium, paid by the buying party to the providing cooperative(s), benefits employees through “community projects such as education and healthcare” while on a cooperative level farmers benefit from being able to invest premiums in democratically chosen objectives (Max Havelaar, N.N.-b). Next to the aforementioned premiums, FTI (N.N.-a), describes how buyers of FT certified products are also required to, if need be, provide pre-financing to enable producers to invest in their enterprises which not only benefits the producing parties but “...can assist the economic development of entire rural communities” (FTI, N.N.-a). The social- and environmental criteria revolve around requirements that have to be met by farmers and cooperatives regarding “environmentally friendly cultivation, abiding by labour rights and a transparent and democratic mode of conduct within the cooperatives” and have several advantages (FTI, N.N.-a). For one, employees on plantations must be united under Fairtrade Premium Committees responsible for, in a democratically and in a transparent fashion, deciding wherein received FT premiums ought to be invested (Max Havelaar, N.N.-b). Furthermore, employees are stimulated to join a trade union or otherwise, “...if that is not possible…”, rights and interests will be represented by Workers Committees on the plantations (Max Havelaar, N.N.-b). Instead of dictating how high wages for employees should be, FT is aimed at bettering the position of employees in labour negotiations and collective bargaining through education and trainings (Max Havelaar, N.N-c). In the context of ‘social development’, FTI, (N.N.-a) describes how, training opportunities should be available to employees and that discriminatory employment practices, child- and forced labour are prohibited under FT certification (FTI, N.N.-a). Additionally, FTI (N.N.-a) further specifies that, in hired labour situations, working conditions should be equitable to all workers, health and safety measures must be in place to avoid work related injuries and that “salaries must be equal or higher than the regional

average or than the minimum wage”. A disadvantage for employees, sketched by Max Havelaar (N.N-c), lies in the ease with which employers can rollback instilled FT rules and requirements when competitive positions are threatened, if FT policies are not firmly ingrained in company policies. In relation to FT buying and selling parties, it is stated that FT only works if there is enough demand for FT certified products (Max Havelaar, N.N-a). Although this is followed by a reassuring note, stating that the yearly demand in the Netherlands is significant and growing, it can be deduced that a decrease in demand, for any reason, can negatively affect all involved with FT. The disadvantage in this case was formulated as, in the case producing parties, dependence on external demand and/or vulnerability to decrease or drop in demand. In relation to consumers, advantages of FT certification are that, through buying FT certified products, one can “contribute to better work and living conditions for farmers and their families in developing countries” (Max Havelaar, N.N-d). The advantages for consumers of FT certified products are framed in terms of ‘doing something good’ and the ease and convenience by which this can be achieved through the purchase of ‘good quality’ FT certified products, epitomized in slogans such as “That's how easy doing good can be!” and “Fairtrade, enjoy with a good feeling!” (Max Havelaar, N.N-d). A second advantage for consumers lies in the reliability of adherence to FT requirements, guaranteed by FT certification (FTI, N.N.-b). FTI (N.N.-b), states that “consumers have high confidence in Fairtrade and the integrity of its system” after which this level of confidence is legitimized as a consequence of FT’s independent and consistent evaluation methods.

Max Havelaar and Fairtrade International’s perceptions on Fairtrade certification Summing up, the following advantages and disadvantages as a result of FT certification and schemes were identified out of promotional materials and documents derived from the Max Havelaar Foundation and Fairtrade International. A schematic visualization of the described advantages and disadvantages of FT certification are portrayed in figure 5. For farmers, participation in cooperatives is advantageous because it makes investment easier, improves bargaining positions, leads to better prices received for produce, improves market access, prevents internal struggle and creates opportunities for training and education. Other advantages are that the provided minimum price allows for investment in

one’s enterprise and protects from price drops on the world market, while received premiums and pre-financing enable even further investments. Disadvantages for farmers stem in possible inability or unwillingness to participate in cooperatives, making participation in FT certification impossible, and dependence on- and vulnerability to decreases in external demand for FT certified products. For employees, received premiums are invested in, by employees democratically chosen, community projects, whereby employees are stimulated to join workers unions and participate, get training and education in collective bargaining processes. Another advantage relates to working conditions because child- and forced labour are prohibited, equitable and nondiscriminatory working conditions have to be available for all, health and safety measures have to be in place and employees are paid, at least, the minimum wage. A disadvantage lies in the inability of FT certification, and or institutions, to prevent employers from abolishing FT principles from mode of conduct when competitive position or profitability are at stake. Advantages on communal and regional levels are that farmers participating in FT certification and abiding by its principles can positively influence their respective regions, while pre-financing, provided by buyers of FT produce, can expedite economic development of rural communities. Finally, advantages for consumers lie in the ease and convenience by which consumers, and also FT consuming companies, can ‘do something good’. A second advantage for consumers is that the FT certification, in itself, is independently controlled and gives an assurance that the product was produced following FT requirements.

2. Consumer perceptions on Fairtrade certification

The following chapter discusses the data and findings derived from the qualitative interviews conducted with consumers of FT certified products and FT certified wine. 32 interviews were conducted with respondents residing in the Randstad region in the Netherlands between April and May 2018. The interviews took between 10 and 20 minutes, were of semi-structured nature and followed the item list described in the methodological section and visible in figure 4 of the appendix. The chapter is will discuss the perceptions on FT certification put forth by consumers whereby the named advantages and disadvantages on the different levels will be reviewed. The chapter concludes by summing up the overall perceptions.

Employee level The main advantages of FT certification on employee level described by almost all interviewees concerns paid wages, profit distributions, working hours, working conditions and social benefits such as pensions. Statements such as “honest profit distribution, but, also working for a company where they can be ensured, are sure of their wage”, “good working conditions, pension, and some kind of insurance for when they are sick, or their kids…” and “...livelihood. Because it, it goes further then income alone, it's about being able to properly organise your life without constant insecurity…” show the diversity of the examples given of advantages given on the employee level. Two thirds of the consumers questioned was unable to think of a disadvantage originating from FT certification on employee level. Those that did, named possible conflict between employees working under FT certification and those not under these schemes. “It might create competition, jealousy even maybe, through which they might end up in conflict”, where an interviewee points out that conflict might occur as a result of inequity between employees within and outside of FT certification systems. Others described how conflict might occur over unfair appointment of jobs, “...that one group gets all the good jobs, so to say”, which in turn might cause or aggravate pre-existing tensions and conflicts. Others stated that employees might be worse of under FT regulations because rigid regulation and did not permit for “underhand deals”, “flexible accounting” and “earning black”.

Enterprise level On the enterprise level, the advantages named by the interviewees mainly concerned benefits felt by enterprises involved with or selling FT produce/products on the purchasing and consuming side of the GVC. The primary advantage of FT certification put forward by the interviewees concerns an advantage for FT produce importing and retailing actors, namely, a good marketable image which creates access to a new and growing niche market. According to the interviewees FT has “...a very big marketing aspect to it, so the name Fairtrade already does something to the consumer” and FT importing and retailing enterprises “...advertise that they engage in fair trade. There is a group of people who specifically wants that”. The respondents furthermore added that “...ethical consuming is also becoming more fashionable...” whereby all the respondents described the consumption of FT products and, to a lesser extent, ethical consumerism as a growing trend. The primary advantage named on enterprise level on the producing side of the GVC concerned the minimum price for produce guaranteed by FT institutions. Respondents all mentioned a “higher” or “more stable price” paid for certified goods when questioned upon benefits of FT certification on enterprise level. Statements such as “honest profit distribution…being sure of your income or something” and “...an advantage is that you will be guaranteed a higher price for your products and, I think, also a more stable price”, summarise this argument. A second advantage relating to producers of FT products, concerns the image and marketing aspect of enterprises under FT certification and or selling FT certified products. Interviewees described that the positive image attached to FT benefits producers adhering to these standards in granting them access to a growing niche market. Statements such as “...it [consuming and purchasing FT certified products] is getting more and more into fashion…” and “...it [consuming and purchasing FT certified products] is hip, more people want it…” signal that, in the perception of consumers, producing FT certified products grants enterprises access to an expanding niche market. The FT certificate, in this case, was seen as the only legitimation or proof of ethical treatment of workers on the producing end, and simultaneously seen as the only reason why consumers would spend more on such products. Interviewees made clear that “...without certification there is no proof” and pointed out that the persuasive power of FT certification is in their opinion, a great advantage.

Another benefit, mentioned by about half of the respondents, stems from additional services and support, received from FT affiliated institutions, for participation in FT certification. The interviewees described how, in their perception, FT certification schemes not only support farmers and corporations by guaranteeing more income and a guaranteed price for their produce but also provide support and guidance, in the form of training and educational schemes towards a more sustainable, efficient and profitable business operation. Interviewees spoke of farmers not only being able to profit more from their activities as a result of participation in FT certification, but that farmers are also “guided towards strengthening their capacities”, which entails the continued achievement of a higher level of production. “It's an improvement process”. The first disadvantage named by the majority of the respondents concerns the uncertainty of adherence to FT certification on the producing end, which could cause reputational damage for retailing companies. “A disadvantage for an enterprise... Maybe that it doesn't work out?” and “...they might get cheated…” with which they meant that enterprises on the consumption side of the GVC might import or purchase produces that are branded as FT while in reality they are not produced under the set requirements needed to carry such a certificate. Furthermore, the interviewees made clear that if this is the case and consumers or the media get a hold of such information that “...then you [as a FT retailing and/or importing party] really loose face…”, “...yeah then we won't buy it anymore…” and “in that case you might lose your clientele”. Another disadvantage named by the respondents concerns the entrepreneurial position of enterprises dealing in FT. Several pointed out that, although FT certification grants access to a new market, it can also act as a limiting factor for enterprises. Companies catering to ethical consumers are at the mercy of inconsistency and sensitivity to consumer ‘hypes’. “You also notice it with biological or ecological products; the media influences our choices daily”, whereby an interviewee pointed out the fickle nature of consumer preferences. The most prominent disadvantage described for enterprises on the producing side of the value chain, revolves around FT certification possibly being a risky investment. Many respondents said that aiming to participate in FT certification could turn out to be unfavorable because increased costs of production simultaneously increase the minimum price needed per unit produced which in turn can restrict market access if there are not enough potential

buyers. FT certification could actually make affiliated producers more vulnerable to the forces of the market and “subordinate to external demands”.

Regional and/or national level On a regional and/or national scale, about one third of the interviewees stated that they could not think of an example. The interviewees described that, in their views, it was questionable if adherence to FT requirements could create any significant benefits on regional and/or national scales because, “...the demands and goals are not rigorous enough…”, pointing towards the little effect that FT might have on regional and or national scales. The advantages and disadvantages described by the remaining interviewees mainly revolved around benefits of economical and structural development, ethics and image, and disadvantages such as dependence on external markets and loss of autonomy and control. The most prominently named example of an advantage of FT certification on national and or regional scale, concerned regional and national economic development on the long term, as a result of more economic capital being available for participating producers and their surroundings. This dynamic can be epitomised by the following quote: “...the people who make it [FT certified raw materials or products], they get more money, and then they can also spend more as a result of which the economy in that country also becomes stronger…”, while, to a lesser extent, interviewees also spoke in terms of “human capital” and “capacity building” in pointing out that, on the long term, an improvement of the livelihoods of farmers and workers at the lowest tiers of a region or nation could also benefit the regions and nations wherein they reside. Other advantages concerned an overall improvement of labour relations and reductions in labour exploitation and corruption among government- and other controlling officials because of adherence to FT requirements and control by independent FT institutions. This overall improvement of labour relations and adherence and independent control of FT requirements, in turn, could, as described by the respondents, lead to a bettering of the image of FT produce producing countries leading to an increase in demand and export of produce out of these countries. A second advantage named, concerns the positive effects that FT certification can have on the image of producing and importing regions and nations. The respondents, in using terms such as ‘ethical, ‘image’ and ‘country image’, described how participation in FT schemes or adherence to FT requirements could have positive effects on the image of

producing regions and or countries, where FT production takes place, and the corresponding (political) elite alike. This improvement of image positively benefits regions, nations and elites because, according to the interviewees, this shows their goodwill and strivings towards a “more just world” and “sustainable development, which, in turn, can help them make better deals and increase trade in FT produce”. In relation to the image of purchasing and or consuming regions or nations, some described a similar dynamic although with a larger emphasis on ethics. “Well with our history… it's not that weird that we set the right example”, an interviewee, in reference to Dutch colonial- and trade history, stated. Herewith, the interviewee meant that in respect to the views of other nations, the Netherlands as a trade country should set the right example for other countries. Other interviewees, in the same line of thought, added that an improved image of importing countries might alsof positively influence political- and bargaining positions. The most commonly named disadvantage of FT certification on a regional and or national level, is that in FT participating regions or nations possibly become (or are) dependent on external demands. Many pointed out that in their views, although not by all perceived as a negative development, authorities in FT producing countries under FT certification could lose much of their influence and authority. Statements such as “I can imagine that meeting the demands [set by FT institutions] can be against their [as in local power holders] interests” and “meddling of Western countries in their country. Thus they [FT institutions and the nations they are based in] are coming closer, they are going to pay more attention and give more critiques and opinions, causing them [governments of FT producing countries] to be less autonomous with all their corruption…”. To a lesser extent, interviewees also pointed out that FT producing regions and nations might be vulnerable to decreases in demand, in absolute quantities, of FT produce. “I don't think that Fairtrade products are popular on their local markets, so if we don’t want it anymore…”, one interviewee stated, after which it was explained that decrease in demand for FT products from external markets might leave regions and nations who abide to FT rules and requirements with a surplus of unsellable produce. About a third of the interviewed declared that on a national scale FT certification could also lead to disadvantages on the consumption side of the GVC. These interviewees described how the strivings of FT institutions combined with a growing number of consumers purchasing FT certified products could weaken the economies of FT importing countries.

Statements such as “...we are kind of giving up our advantage” and “the more they progress [in economic development terms] the more we [as in FT importing countries] lose strength as an economy…”, were followed by the explanation that economic development of countries where FT certified produce originates from is not necessarily beneficial or could even weaken the economic position of countries importing and consuming FT certified produce.

Consumer level In relation to advantages for consumers, all interviewees mentioned that “...it is emotional”, that “it is really about the good feeling”. Where they all spoke in terms such as, “peace of mind” and “good conscience”. Interviewees described how these feelings stem from the idea that by purchasing FT certified goods one can be “... a little more sure of the chance that your product is not produced to someone’s disadvantage” and “....that you know that there is something available that is slave free”. To a lesser extent, they added that the aforementioned feelings also stem from the idea that by supporting FT, one is contributing to a long term vision, “...a slightly more just world…”. About half of the interviewees described how with their purchases they felt like they were setting an example for a narrative around and the presentation of FT products to friends, guests or others, in some way. This becomes clear from statements such as “...it sounds weird, but when I use… [FT certified products]... and my friends come over to eat, I also send across the message ‘guys you should also do this’, so it is also about setting an example”. “When I have people over, I always tell them why they should also get into Fairtrade”. A large proportion of this group also declared that sharing the narrative of FT across their personal surroundings was also rather self-centred, namely, the creation and/or maintenance of image towards others. Statements such as “...whereby I show that I am conscious…”, “...it sometimes feels nice to lecture my guests about Fairtrade”, “...it's also hip, it fits the zeitgeist” and “...generally when I have a girl over I buy Fairtrade wine…”, show that respondents use the purchasing and consuming of FT certified products and repeating its narrative to an advantage in their social relations. Concerning the disadvantages of FT certification for consumers, all interviewees primarily named a higher price as the most important disadvantage experienced by consumers of FT products. “Price”, just the one word, was the general first response they gave upon questioning them on possible disadvantages for consumers of FT certified products.

A second disadvantage, put forward by almost all interviewees, is uncertainty felt about the degree of truthfulness of the claims made by FT institutions, enterprises and retailers. Statements such as “...you always think to yourself ‘would it really be like that? Would it really?’” and “well, how can we know that it all checks out? Let's hope it's not all nonsense”, signal that, although all interviewees said to believe in the narrative and the importance of FT, there exists a certain mistrust and uncertainty about if the claims made by the Max Havelaar Foundation, and associated organisations are fully genuine. Furthermore, over half of the interviewees described that their distrust was partially a result of an overemphasis on all the ‘goods’ coming forth out of the efforts of the Max Havelaar Foundation. “...By looking at a nice website it becomes really hard for me to see how it is actually implemented”, with some respondents even describing it as “propaganda”; “it is always nice weather according to them, how can we believe that?” A third of the interviewees described how although FT certification promises improvements along the value chain on many facets, it does not imply that the purchased products are organically produced, or to a lesser extent, healthy. On the same line of thought, some stated that the existence of FT certification, because of its narrow focus and the existence of several other types of certifications for products, also led to confusion and, in some cases, annoyance. “There [different certification schemes] are already so many, now I also have to pay attention to this one” and “sometimes it is one or the other...why can't it be all in one?”

Consumer perceptions on Fairtrade certification Summing up, the following perceptions were retrieved from the interviewed consumers. On the employee level the main advantages revolved around improvements in labour relations and access to support such as training and education, while the disadvantages concerned possibilities of conflict and loss of flexibility in business management as a result of FT control. On the enterprise level, the main advantages concerned improved image and marketing possibilities for enterprises on the consumption side of the GVC, better pricing and access to a growing niche market, and access to training and support for bettering one’s business on the production side of the GVC. The disadvantages involved possible reputational damage and volatility in demand on the consumption side of the GVC combined

with participation in FT certification being a risky investment and creating a dependence on external demand for FT certified produce on the production side of the GVC. On the regional/national level, the advantages concerned a bettering of economic strength, improvement of labour relations on a regional and national level on the production side of the GVC while on both sides an advantage lies in an improvement of image and bargaining positions. The disadvantages concerned a loss of autonomy to external actor(s) and a dependence on external demand on the production side of the GVC, while on the consumption side of the GVC it concerned a loss of economic strength. Finally, on a consumer level the advantages concerned a feeling of ‘peace of mind’, being able to set the right example or in some cases show off while the disadvantages mainly concerned a higher price paid for FT certified products and uncertainty about the truthfulness of claims made by FT certification.

3. General retailers’ perception on Fairtrade certification

Three interviews were conducted with retailers where FT certified wine is sold. The length of the interviews varied between 25 and 40 minute and were conducted in person or via Skype. The general narrative about FT certification from the retailers in comparison to that of the FT specialised retailers is different in several ways. Firstly, the non FT specialised retailers had a more sceptical and negative stance towards FT certification and its workings. Although none of the interviewees described FT certification as solely negative, statements such as “it is all a hoax” and “they are purposefully misleading the people” were brought up multiple times. The narratives of both the wholesale retail manager and the wine salesman where rather critical of FT, with the wholesale retail manager mainly pointing out disadvantages of FT certification for small(er) independent enterprises and the wine salesman mentioning the trustworthiness of claims made by FT wine producing enterprises. The online wine wholesaler was more neutral and pointed out that for him, having FT certified wines available was a result of consumer demand rather than a positive convictions about FT and its workings.

Employee level

The main advantage for employees named by all interviewees, although often stated with a suspicious or sceptic tone, concerned better pay and working conditions. “They probably get paid more” and “...if everything checks out they should be better off, in terms of working conditions and such”, summarise these rather sceptic perceptions. Only the wine salesman described a disadvantages on employee level. “I can imagine that if [FT wine producers] meet the conditions [set by FT institutions], then they won't have a reason to do their best any longer”. The interviewee furthermore explained that, in his views, the set requirements in relation to wages in many cases where not adequate to really make an impact. “It's just a guarantee of minimum wage”, the interviewee explained after which he added that FT requirements should motivate their certified members to continuously strive for the betterment of their employee’s income.

Enterprise level The primary, by all cited, advantage on enterprise level revolved around marketing benefits and improvement of company image mainly for enterprises active on the retail and consumption side of the GVC. All respondents referred to a FT chocolate bar producer who, in a relative short period of time, managed to appropriate a significant part of the Dutch retail chocolate market and has become a large enterprise. Doubtfully, the wholesale retail manager added, “...they [the FT chocolate producer] are growing with such speed, can it all still be in order?” after which he explained that, in his opinion, such a rapid increase in scale makes control of adherence of sold products to FT requirements difficult. This scepticism about sincerity of claims made by FT certified enterprises was also shared by the other interviewees. Statements such as “it’s a nice marketing trick…” and “...it’s mainly a good story, but that is what people want to hear, that’s what they want”, shows the sceptical stance of the interviewees towards the effects of FT certification. A primary disadvantage, described by all interviewees, was that although for different reasons, FT certification schemes could lead to barriers to participate in FT for farmers, companies and enterprises on both sides of the GVC. “That sticker is really expensive…” the wholesale retail manager stated. He furthermore stated that the “high costs of acquiring certification makes it impossible for farmers, who possibly on the basis of the set requirements are eligible for certification, are incapable of acquiring it”. A second barrier as a result of FT certification concerned the by FT institutions set rules and requirements for

participation. The wholesale retail manager, in an anecdote, described how farmers who use alternative, possibly traditional, modes of production with respect to FT requirements, but simultaneously meet the majority of FT requirements, could be restricted from access to FT certification because of high costs of adapting to modes of FT production. . A disadvantage sketched by two of the interviewees concerns the loss of independence and possibility for creativity or “the possibility of doing things differently”. The wholesale retail manager expressed: “The cooperative decides, you have to play along or get shut out”.

Regional and/or national level Regarding the perceptions on a regional and national level the answers of the interviewees were more diverse. While the wholesale retail manager did not name an advantage, the online wine wholesaler and the wine salesman did. The online wine retailer described how, in his perception, FT certification increases trade flows between “...poor countries and rich countries making both our economies stronger”. The interviewee went on in stating that “if all is right…”, whereby he referred to the claims made by FT institution in relation to premiums and other FT requirements, “... the extra money spent here, remains in their economy which improves them”. The online wholesaler furthermore added that an advantage of contributing to the economic development of FT producing regions and or countries is that “if they [FT producing countries/regions] have stronger economies it is also good for us…” after which he put forth that strong economies reinforce each other and that on the long run “...it is better for us all”. The wine salesman described how, “if I understood it correctly, they [FT producing actors] receive more money, also through premiums…” This extra capital could be used to better the lives of communities involved in FT. Both the wholesale retail manager and the wine salesman described that a possible disadvantage of FT certification on a regional or national level could stem from in an increased amount of control derived from certifying and controlling institutions which in turn affects the independence of regions and communities on the producing end of the GVC. The interviewees described that, since some countries are very dependent on their agricultural exports, if a large volume of the agricultural export of a country is FT certified that FT institutions, with their certifying and controlling power, can make or break the economy of a region or nation. “It is just like in colonial times”, the wine salesmen stated while the

wholesale retail manager, described it as “a monopoly-effect: you lose your control to an external party”.

Consumer level On a consumer level the three interviewees gave similar answers. The main advantage lies in consumers being able to contribute to a bettering of the circumstances of people involved in the production of a FT certified product. However, the interviewees described this advantage by showing their own restrictions and disbelief about the benefits of FT certification. Stating how “...a benefit is that they [FT consumers] think they buy something good”..., “if it’s true…”, he sceptically concluded. The primary disadvantage named by the interviewees related to the price of FT certified products being more elevated then their non certified counterparts. “It's a bit more expensive but the difference is getting smaller…” the wholesale retail manager stated. The others emphasised the price-quality ratios; “for the type of wine you get, sometimes, it can be rather expensive”. A second disadvantage for consumers concerns the truthfulness of the claims made by FT institutions and certified enterprises. As described on multiple occasions, the interviewees were rather sceptical about the workings of FT certification and its institutions whereby, additionally, the increased price of FT certified products, it was completely uncertain for consumers to what extent and or if products are produced according to FT rules and regulations. Statements such as “You pay more, but how can you ever be sure?” were voiced by all interviewees. Another disadvantage, in this case named by the wine salesman and the online wine retailer, was that, in the case of FT certified wines, FT certification did not guarantee a good wine quality. Indeed, “in some cases FT certification even equals bad quality of wine”. The salesman, when describing his daily scruples with clients, stated that “...often the cheaper Fairtrade certified wines are really bad”. After which he described that “...if there is a good story to tell about the product, I rather emphasise that then the quality of the wine”. The online wine retailer stated that “not all the Fairtrade wine we sell are of great quality, I think people also just buy it because it is Fairtrade certified”. Lastly, the wholesale retail manager described that in his views a disadvantage also stems from the increasing amount of FT products that are being certified. Although in his personal opinion having to pay more to

facilitate FT, the increase in FT certified products also limits the choices of consumers not to purchase FT certified products.

4. FT specialised retailers’ perception on Fairtrade certification

The FT specialised retailer declared being actively involved with FT for over ten years. She described how, for the majority of her products, she did not have direct contact with the producers. The FT employee has been active in FT retail of over four years and claimed to have “quite some insights in how it all functions”. An overall benefit of FT certification described by the self-employed FT retailer, lies in farmers and employees partaking in the production of FT certified products notice that “all their toil leads to a little more than just the same bitter poverty”. She described that the possibility of producing and selling under FT

requirements not only creates economic benefits but also shows that “...there are people in this world who do not only see the workers in developing countries as someone who can produce the cheapest rice, the cheapest sugar or the cheapest coffee but also think you have a right to development”. The FT retailer described how FT farmers have stated that participation in FT certification did not only reap financial benefits but that prospects for farmers had improved to such an extent that their communities as a whole benefitted. The FT retailer cited the FT farmers by stating: “We have regained our dignity”.

Employee level On the employee level, the FT retailer, in the specific context of SA and their wine production, described how the main benefits for employees as a result of FT certification stem from improvements in working conditions, such as wages and working hours, and the respecting of workers rights to collective bargaining, association and negotiation with employers. She described how, in the context of South Africa, prior to the abolition of apartheid, it was unthinkable that employees could “...join some kind of union or organisation, that you are allowed to organise to stand up for your own interests”. She added that FT certification is beneficial for employees because this certification can only be obtained if an employer respects the rights of employees, “...that is something FT keeps on hammering about on the plantations”. The FT employee, similarly, described how FT certification “...supports employees through controlling if they are paid properly, that they have decent working conditions and that they can unite for negotiations and such”. Both interviewees stated that they could not think of an example of a disadvantage felt on this level as a result of FT certification.

Enterprise level On the enterprise level, the FT retailer stated that in her opinion, advantages for companies participating in FT certification or dealing with FT certified goods reside with larger FT importing and retail companies on both sides of the GVC and consist of an increase and diversification in market shares and access and an improvement of company image. The FT retailer explained that the Max Havelaar Foundation from the onset had the “...explicit goal to enlarge that [FT] market”. Additionally, she stated that although most supermarkets

are not that interested in if a product is FT or fair “...they are interested in a new market” The benefit for retailers lies in the ease whereby such companies are able to enlarge there markets, increase their profits while simultaneously improving their company image. Moreover, the interviewees stated that on the enterprise level, and on the production side of the GVC, the advantages of FT lie in a guarantee of received price for produced goods. The FT employee stated how “they [FT producing enterprise] get a guaranteed price for the work they've done” after which he stated that “that is important because they otherwise, often, don't make enough to keep themselves afloat”. The FT employee described that an advantage coming forth out of the guaranteed prices for produced FT goods also enable enterprises “...to further develop so that they can build up a better existence”. Regarding the disadvantages on enterprise level, one was the dependence of FT certified employers and other producers on the production side of the GVC on the external demand for their products on the consumption side of the GVC. This is because, as stated by the interviewee in the context of cocoa, “...a farmer not only needs that you buy a pack of his product but that large processors of cocoa also buy Fairtrade cocoa otherwise it just does not help, enough”. A second disadvantage relates to the financial costs of acquiring a FT certificate for ones product. FT certification, “a given often unknown to FT consumers, costs money and can act as a financial barrier for farmers and or employers willing to partake in FT certification”. The FT retailer described how fees related to obtainment of FT certification are needed for support of other affiliated parties and by the Max Havelaar Foundation to be able to function without government subsidies. Nevertheless, she described that the price of certification could reach several thousands of euros. “And for a group in a developing country that can be a whole bunch of money to spend on or amass for FT certification”. In relation to the aforementioned disadvantage, in case an actor is able to finance the costs for FT certification but the external demand for the FT certified goods fails to manifest or lacks in volume “...then it may be that [FT certification] does not benefit you at all”. “When you payed for Fairtrade certification, but you’re are not able to sell all your Fairtrade products...it leaves you with additional expenses”. A final disadvantage of FT certification, described by the FT retailer relates to the, by FT institutions set requirement of FT producers, working with a cooperative. The interviewee described that if a farmer is unwilling or unable to join a larger cooperative, the requirements set by FT institutions could act as a barrier to participation in FT certification and mode of conduct. Nevertheless, requirements set by FT

institutions are still justifiable because it is not the task of FT institutions to support enterprises with little prospect on success. Furthermore, in relation to guarantees of quality on FT certified products, “...the smaller you are, the harder it is to meet the set requirements” showing that in the perceptions of the FT retailer, although in some ways justifiable, FT certification can create disadvantages for participating and non-participating producers alike.

Regional and/or national level On a regional and or national level, the FT retailer, in describing the workings and effects FT certification in Thailand, named an increase in production processes carried out on the production side of the GVC and an increase in attention for and the spread of FT norms and values as the main advantages of FT certification. “There [Thailand] FT certification is so successful that the government all of a sudden is getting very interested in FT. Something like ‘yes, that is a development where our farmers also benefit of international trade’”. She continued to explain how, because of the increased governmental attention for FT, the norms and values of FT are also spreading to other branches and industries that are not FT certified. The FT employee described that he could imagine that a advantage of FT certification resides in the “...reinforcement of communities…” that in turn could also have positive effects on the surrounding regions and nations. The interviewee described that due to more financial capital being available to in FT involved enterprises, not only employees and enterprises benefit but that the increase in available financial capital “...is also beneficial to their [employees and enterprises their] surroundings because the profits are also spent there”, hinting at that the increase in available financial capital could be beneficial to regional and national economies. When asked about possible disadvantages on regional and or national level as a result of FT certification the interviewees both declared that they could not think of an example.

Consumer level The, by the FT retailer, described advantages of FT certification practices for consumers revolved around being able to “...directly give the possibility to do something”. “In many cases, FT products are of high quality but it cannot be said that Fairtrade wine is of better quality then other wine but Fairtrade products are generally very tasty”. The retailer furthermore described how FT products are increasingly packaged in a more attractive fashion making them suitable as gifts. Often, FT certified products are also organically certified. The FT employee, in a similar narrative, stated that “they are often beautiful

products”, after which he explained that, in his opinion, FT certified products are often not only physically appealing but “...often also special and particular…” by which he referred to specific qualitative characteristics such as flavour and composition of ingredients. When asked about the, by consumers often cited benefit of ‘peace of mind’, the retailer responded in a dismissive fashion. “Well, when you say ‘peace of mind’ then it sounds a bit as if you are appeasing yourself a little”. From her own experiences, many FT customers felt that purchasing FT products is the least they could do to contribute to a fairer world or the bettering of the live of others. “Do you think of yourself that your can tackle the whole world?”, she asked. “Purchasing FT is a significant contribution”. Throughout the interview, she was of the opinion that FT certification benefits employees, farmers and companies alike. By purchasing FT products “...you buy something from which you know that it does not burden the earth and whereby you know that everybody does their best to better the situation of people, well, how great can it be?”. Moreover, she expressed that because FT products are widely available in a variety of stores, “FT is a pretty ideal means to serve everyone, from highly aware people to the people that actually only think ‘my sister says that it is good coffee so I will also buy a pack’”. “This availability and accessibility is a major benefit”. Contrastingly, the FT employee described how this ‘good feeling’ is derived from consumers knowing that a FT certified product benefits the plight of others. The main disadvantage of FT certification for consumers, sketched by both interviewees, revolved around FT certified products being more expensive than non-certified products. As described by the interviewee, because of requirements set by FT institutions in relation to paid price for produce and additional premiums, “...the base [of FT products] is always a little more expensive. You can't evade that”. This is especially the case with wine; “the difference in price is the largest in comparison to non-Fairtrade products available in the supermarket”. The FT employee added that a disadvantage for consumers is that in some cases customers request FT products in unavailable quantities at his enterprise. Moreover, he described that in some cases it could take quite some time before stocks are replenished.

Perceptions on Fairtrade certification of general and FT specialised retailers Summing up the above described perceptions of general as well as FT involved retailers the following perceptions were retrieved. On the employee level, all interviewees

described how FT could benefit improvement in wages, working conditions and respecting collective bargaining rights. In relation to disadvantages, the only example concerned FT certification not motivating employers to strive for more other then what is required. On the enterprise level, the advantages cited concerned company imaging and marketing combined with access to a niche market for enterprises on the consumption on both sides of the GVC. Another advantage lies in guaranteed prices paid for under FT requirements produced goods which in turn creates possibilities for further development. The disadvantages cited concerned barriers to participation in FT for enterprises on both sides of the GVC, as a result of stringent rules and requirements. Moreover, a loss of independence of enterprises to cooperatives, dependence of demand for FT certified products laying with external actors and wanting to participate in FT being a ‘risky investment’. On the regional and or national level, the advantages named concerned national and regional economic development on the production side of the GVC, indirectly also benefiting economic development on the consumption side of the GVC, communal development, increases in production carried out in FT producing regions and nations and increased government attention for FT principles leading to further diffusion of these principles. The disadvantage named on the regional and national level concerns an increased amount of control or loss of autonomy for producing regions and/or nations to an external actor. On the consumer level, the advantages concern feelings of satisfaction as a result of the idea that someone’s benefits from your purchase, the good quality and attractiveness of FT certified product, and the increase access and availability of FT products. Disadvantages on the consumer level concern a higher price for FT products, uncertainty over the truthfulness of claims made by FT institutions and involved enterprises, a lesser quality of FT products and a decrease in freedom to choose a product that is not FT certified.

5. Horizontal dimensions of power - the Dutch NGO workers and the FT authority

The following chapter discusses perceptions residing with horizontal dimensions of power on the Dutch side of the Global Value Chain (GVC). Four interviews were conducted of which one with Hans Beerends, writer, co-founder and former coordinator of the Worldshop movement, and three NGO workers with varied expertise such as commodity trade, land rights, sustainable land use, food security and ‘fair’, biological and or sustainable flower production and certification schemes. Beerends had a rather neutral narrative and explained that he does not see FT as a negative development, but that it is not radical enough. “It should be thorough and clear, we need to take the political angle out of the question”. Two NG workers gave a rather critical narrative concerning the workings and the credibility of FT certification schemes, whereas the other expressed an overall faith in the phenomenon.

Employee level On an employee level, the advantages named by all interviewees concerned issues around working conditions and working hours. They mentioned the abolition of exploitation and forced labour and employees enjoying a more ‘fair’ income and better employment relationships, felt by employees working in a FT certified enterprise. Furthermore, two of the NGO workers stated that, to their knowledge, another advantage for employees is having access to training and or education to improve labour productivity and overall wellbeing. Another advantage on employee level, named by Beerends, concerned that FT certification had led to an increase of awareness with employees that other employment circumstances, outside of those in which they are currently residing, exist. “FT certification led to that one can see that there are also escape routes, that you’re are not completely bound to the landowners. This awareness about possible alternative labour relations could inform civic and or political action”. The sole disadvantage, named by the NGO workers, as a result of FT certification on employee level concerned the possibility of emerging communal tensions. These tensions could stem from a high demand for employment and or jealousy of the unemployed outside of FT requirements, since employees that work for a FT enterprise might enjoy more pay and better labour conditions. Beerends, although not describing it as a disadvantage for just employees but rather as a disadvantage stemming from FT, described how, since the advent of FT certification the political message and ‘radicality’ had disappeared. He described, on

multiple occasions, how before the advent of FT certification, during the prime of the worldshop movement, the selling of ethical products was accompanied by a call for support and actual political action. Beerends stated that nowadays, while a larger share of general enterprises and “...society becomes a little more progressive, simultaneously the radicality decreases”, whereby he pointed out that the radicality lies in the political objectives the worldshop movement had. The disadvantage for employees lies, according to Beerends, in that FT certification no longer possesses this ‘radicality’ and because of that not enough progress is made towards the bettering of the plight of employees in developing countries. “Isn't it time that that radicality returns? Or does it keep on trickling on in this way?” he stated after which he explained that in his views more structural and political change, to the benefit of employees, could be achieved if the ‘radicality’ would make a return in FT objectives.

Enterprise level On an enterprise level, the advantages for enterprises residing in SA mainly revolved around pricing. Interviewees mentioned the stability and guarantees of prices for their sold produce, and the availability of training and support for certified companies aimed at improvement of entrepreneurial positioning. Two NGO workers mentioned that involved enterprises receive a guaranteed ‘higher’ price, while others described how the advantage lies in a minimum guarantee for FT certified produce which covers production costs. A second advantage for enterprises is the access to training and support provided by actors involved in FT. According to one interviewee, FT certified enterprises “...get trainings for improvement of harvests…” which in turn, “gives enterprises not only the opportunity to improve the workings of their enterprise but also aids them to preserve independence in the sense that [FT certified enterprises] are not so easily inclined to be swallowed up by a large company or conglomeration”. The NGO worker continued to explain that, in her perception, FT certification helps enterprises retain their independence in face of larger competitive actors and educates, trains and supports them with issues such as price bargaining and land rights. Strikingly, only one NGO worker described the FT requirement of working with(in) a cooperative as an advantage for enterprises. The interviewee stated that “...as a farmer alone you stand less strong and if you can group [with other enterprises] you are much better able to negotiate on prices”, after which she explained that participating in a cooperative is not

only advantageous for price negotiations but can also improve or lead to a steady demand for FT certified products. As described by two NGO workers, FT certification is advantageous for certified enterprises because it not only serves as a tool for marketing, branding and identification but it also benefits enterprises through improved bargaining positions and access to a growing niche market. One NGO worker stated that “...[if] you have a very strong story...towards the consumer you can claim that you did not have to exploit people to get you product…”. “A strong story and some degree of proof of ethical conduct towards producers and or employees are essential for the successful working, marketing and branding of FT certified goods on the Dutch market”. Another interviewee, in giving an anecdote about a Rooibos tea cooperative in South Africa, described how FT certification, despite that certification is “...just a label…”, helps “...them in negotiating positions…but has also helped them to, in a certain way, identify themselves for who they are… that is the most valuable”. In the context of enterprises on the Dutch side of the GVC specifically, one NGO worker stated that FT certification not only servers as a tool for bettering company image but also serves as a guarantee of ethical company conduct and as justification for the elevated prices of FT certified products for consumers, in comparison to non-certified products. “Through the certification they can prove that they give a good price and that the working conditions are good. And because they can prove that, consumers will pay the [elevated] price”. The advantages of FT certification on an enterprise level for gaining access to the growing niche market was underlined by two NGO workers and Beerends. According to the NGO workers, there is a growing demand in Western countries for products that are produced FT. The interviewees spoke of a ‘niche’ market for ethically and or organically produced goods that is increasing in size. One NGO workers stated that “...because there is more attention, the past years, and also a growing realisation, certainly in Europe and probably also in the US, that many products are not being paid properly, there is a growing demand for products that are produced in a fair way”. “Companies wanting to tap into this demand need FT or other certification”. Disadvantages as a result of FT certification on the enterprise level were only mentioned by NGO workers. They mainly revolved around issues related to the FT certification procedure and the FT certificate, of supply and demand of FT certified products and risky investments. Several disadvantages in relation to the process leading up to acquiring certification and the certification in itself were named. According to two

interviewees, a major disadvantage lies in dependence of enterprises striving for acquisition or renewal of FT certification. It was explained that, generally, the acquisition of certification for one's product is “...often expensive and tiresome…” and “...if for some reason you don’t succeed…”, for example when certification is not achieved or lost, “your enterprise faces considerable negative consequences”. In relation to one of the set requirements for FT certification, namely the joining of a cooperative by enterprises, two NGO workers declared that functioning with(in) a cooperative can be energy intensive and time consuming. “...You [as a FT certified producer] also need to be able to…for a longer time period, invest time, energy and money…”. For an enterprise that simultaneously needs to make ends meet, functioning with(in) or striving for participation in FT certification can be disadvantageous. Furthermore, besides that being FT certified is not a guarantee for a steady demand for your goods, requirements set for participation in FT certification schemes, in relation to, for example, wages and provision of facilities to employees, “...can [negatively] affect your [enterprises] profitability or even eliminate it all together”. The NGO workers also pointed out that FT certification can negatively impact demand for produce in general because of a higher price. For companies on the consumption side of the GVC, a disadvantage lies in the possible reputational damage as a result of a sold product that is not or not completely being produced according to FT standards. One interviewee described the situation as “...that they [enterprises retailing FT certified goods] have confidence in that that their product is completely OK [‘according to FT standards’] but that there, possibly... maybe things that are not in order”. For an enterprise claiming to produce or retail a product that fully adheres to FT rules and requirements, consumers finding out that the product is not up to FT standards might lead to significant reputational damage. Another disadvantage concerns possible difficulties related to the sourcing of under FT requirements produced produce and being able to stay profitable within a relatively small niche market. One of the interviewees stated that with FT certified products, it is imaginable that there are “...less large producers available”. It was explained that if demand on the Dutch side of the GVC is high or if there is competition over available importable FT certified goods, working with FT certified products might cause disadvantageous effects in relation to sourcing raw materials needed for production. Moreover, the interviewees also described that there might be a disadvantage in not being able to sell FT certified goods because of lack in demand. “It is a much smaller group to

whom you can sell”. Therefore, “...they can't get rid of it [FT certified products]. That there isn't enough demand and therefore people willing to pay while there might possibly cheaper producers available who are not FT”.

Regional and/or national level On a regional and national level, the NGO workers all named examples of advantages and disadvantages as a result of FT certification, while Beerends deemed the effects of FT, although positive, insignificant on a regional and or national scale. The named advantages revolved around the improvement of the plight of peoples residing within regions or nations where FT certification schemes are in place, such as increases in economic capital available to them and an improvement of image for sectors wherein FT certification is applied and for the regional and national authorities. The main advantage named by the NGO workers concerned being “treated properly” or “properly cared for” According to one, this change in treatment could, “on the long run lead to an increase in demand” for products from that specific sector that are FT certified. In an anecdote describing the chocolate industry, an NGO worker stated that for some sectors demand is negatively influenced by prevailing stigmas. FT certification could lead to a decline or diminishment of stigma surrounding certain production sectors causing demand and exports for these products to increase which can be advantageous for regions and nations wherein these schemes are applied. The second advantage concerned the improvement of national image in respect to other countries and the image of regional and national authorities. The improvement of national image could be beneficial for negotiation positions regarding “...aid and trade” and other multilateral relationships. Furthermore, the interviewees described that FT rules and requirements improve transparency and discourage corruption which could lead to an improvement of the image of local authorities: “more stable for a country, more certainty”. One NGo worker explained how, in many cases, exporting regions or nations export unprocessed or raw goods that are sold for a relatively low price. The processing of the goods to a consumable product, and thereby the adding of value to the the raw goods, generally takes place in countries where the product is sold. “FT certification schemes could possibly lead to a greater proportion of processing and the adding of value taking place within the region or nation where the raw good originates from”. This in turn “could lead to the creation

of jobs which in turn could lead to inhabitants, of regions and nations where FT certification schemes are active, benefitting from a general increase in economic capital”. Disadvantages on a regional and/or national level related to dependence on external demand for FT certified products, regulated auditing for certification and, possibly unforeseen, effects of FT certification. The most cited disadvantage concerns the dependence on external demand for the by them produced FT certified produce. Statements such as “...you are really dependent on the global export market” and “the demand can decline, so maybe it is a riskier trade”, accompanied by explaining how fluctuations in demand of importing parties can prove disadvantageous for regions and or nations, summarise this argument. Another NGO worker added that a subsidiary disadvantage lies in the dependence on external actors for accreditation and control of FT certification. It was stated that producing regions and nations are “...dependent on foreign audits and certification organisations, so that is a sort of extra standard where you, as a country or regional government have less control over”. “You should not always trust the self-claimed benevolence of these actors”.

Consumer level On the consumer level, the narrative of the NGO workers was very alike, whereas Beerends did not mention any advantage for the consumers. Advantages mainly lie in the idea that one contributes to systemic change. The NGO workers made the advantage of a good conscience from purchasing and consuming FT goods apparent through statements such as “...you can be a little more relaxed about the chance that your product has been produced to someone’s disadvantage” and “peace of mind, because you do not harm others in their existence…”. Furthermore, it was stated that through the purchase and consumption of FT certified goods, with little effort, one is able to contribute to “...system change, good change” and “a more sustainable world” which refers to “the working towards a fair economy with respect for producers, the people who make the product that you eat”. The prime disadvantage for consumers named by the NGO workers concerned an elevated price of FT certified products in comparison to non-certified ones. Moreover, others questioned that not all that is claimed by FT producers and institutions is fully trustworthy and therefore if the elevated price for a FT product is justified. “...A disadvantage for consumers is that there is very little transparency. So, I [as a FT consumer] have to trust that

the extra price paid is actually based on results wherein one has very little insight”. The interviewee, who has quite intricate knowledge about the control mechanisms of certified goods, went on in explaining that, besides certifying companies generally giving little insight in their functioning, actors who perform the controls on adherence to set requirements “...only come to have a look once a year during a pre-announced visit. Then it is very easy for them [FT certified producers] to clean everything up”. This potentiality for concealment or destruction of evidence of nonadherence to FT requirements, according to the interviewee, created a situation wherein the consumer can never be sure if claims made by FT institutions or those who carry it label are fully truthful. Beerends described that in his opinion, FT certification can lead to people thinking that “...by buying Max Havelaar [certified products] the problem is solved”. Beerends went on in explaining that, “while FT institutions and, for example, information on packaging do not claim that they have and are the solution for the plight of producers globally, just as with publicity campaigns asking the public for donations it might cause people to wrongfully perceive the purchase of a FT certified product as the only means of contributing to or the solution to poverty and other malice endured by actors wherefore FT certification was called into life”.

Perceptions of horizontal dimensions of power on Fairtrade certification Summing up, on the level of the employee, the advantages cited concerned improvements in income and labour relations and access to training and or education for the improvement of productivity and general personal development and the creation of awareness that could lead to improvements in labour relations through civic and or political action. The disadvantage concerned the possible emergence of communal tensions as a result of scarcity and or jealousy over available employment under the guise of FT. Beerends added that the absence of ‘radicality’ in objectives of FT institutions led to underachievement with respect to achieving political and structural change benefitting employees. On the enterprise level the named advantages concerned higher or guaranteed prices paid for under FT requirements produced produce, access to training and support for better functioning of an enterprise and retainment of entrepreneurial independence, improvements in- bargaining position, company branding and access to niche markets and a justification for higher prices asked to consumers for the purchase of FT certified goods. The disadvantages on enterprise level concerned dependency on- and difficulties in acquiring FT certification for

enterprises on the production side of the GVC while on the consumption side of the GVC the disadvantages concerned possible reputational damage and difficulties in sourcing but also selling FT certified products. On the regional and national level, the cited advantages concerned improvements of sectoral images leading to an increase in demand, improvement of image for national authorities resulting in improvement of multilateral relationships, increases in transparency, a decrease in corruption leading to improved national stability and possible increases in production processes carried out in regions and or nations producing FT raw materials leading to an increase in economic development in these regions and or nations. The disadvantages on the SA side of the GVC, concerned dependence on external demand and global export markets and loss of sovereignty in governance to external actors. Named advantages for consumers described by the interviewees lie in the ease with which one can contribute to ‘system change’ and or a ‘more sustainable world’. The disadvantages named on the level of consumers concerned a higher price having to be paid for FT certified products and uncertainty for consumer about if claims surrounding FT made by FT institutions, in comparison to non-certified products, are fully truthful and justified.

6. Case Study - Perceptions on Fairtrade certification in South Africa’s Western Cape region

From May 6-17, 2018, a case study was conducted in South Africa’s Western Cape, it’s most prominent wine region. During this period of fieldwork, three semi-structured interviews were held throughout the Western Cape. One interview was held with a winery owner, and two interviews with NGO workers part of the Economic Justice Network (EJN). The following chapter will give a description of the findings from the aforementioned interviews in the order in which the interviews were done over the course of the fieldwork period. Firstly, the horizontal power relations derived from NGO workers will be described, secondly, a description of perceptions at production level derived from the winery owner will be discussed. The chapter concludes with the overall perceptions on FT certification measured in the SA case study.

Horizontal dimensions of power - South African NGO workers Two NGO workers part of the Economic Justice Network (EJN), were interviewed during the fieldwork period. The expertise of the NGO workers ranged from food security and climate change to mining and other (natural) resource extraction and trade. For purposes of anonymity the following section will not specify which expertise belongs to which

respondent and what each respondent said specifically. The interviews were conducted in tandem, with both interviewees present, over a timespan of approximately 3 hours. The picture painted by the two NGO workers about FT certification and its workings in South Africa was a critical one. The experts criticised FT for its inability to identify misconduct and acknowledged that mistakes are being made under their watch. Such as its inadequate auditing procedures, its lack of responsiveness and the maltreatment of workers in companies bearing FT certification. Nevertheless, the interviewees also underlined the value of FT certification and schemes if applied properly, and emphasised that examples of improvement of employer worker relation, but that much more could be improved. When asked about their overall views on FT certification of SA products both interviewees, individually and filling each other in, started a very critical narrative. They spoke of repressive regimes maintained by (large scale) farmers of diverse agricultural products including wine, and conflicts between employees and employers/farmers, predominantly over issues of land and working conditions, paralleled by conflicts between employers/farmers and the state of South Africa. The overall narrative was that FT institutions and other involved actors failed to adapt to the complexity of post-apartheid South African society and more specifically employer-employee relationships combined with issues of land rights. In relation to issues of control, monitoring and auditing of adherence to FT certification requirements and regulations, the interviewees described that it is very complicated for auditors, NGOs, civil society groups and even government officials, to control if certified farmers are actually complying to the pre-set rules and regulations. Auditing institutions such as FLO-CERT, who is responsible for audits in relation to FT, indicate when they will conduct an audit, sometimes months in advance. This is problematic because it gives FT certified producers ample time to “clean up” and “prepare a theatre play”, whereby the interviewees point towards farmers/employers removing any evidence of misconduct or nonadherence to FT requirements, removal of rebellious employees and instructing employees about what to say when the auditors are present. When asked why employees would participate in these “theatre plays”, they stated that if employees where to rebel or to show unwillingness to follow the employers instructions, their “insubordination might have dire consequences”. The interviewees explained how many employees and their families on SA farms are housed on the estates where they work. This means that if an

employee is laid off, there is a substantial chance that their employer will demand the employee, and all living with him or her, to “vacate the premises on the land of the estate owner, which in turn might lead to a destitute existence in a township at the fringes of a nearby agglomeration and in some cases even suicide”. The threat of dismissal and possible homelessness is so influential that “employees surrender and submit to the owners”. According to the experts, employees in many cases have to lease their living accommodation, which is deducted from their pay, and in some cases are even paid in alcohol. The inequity in power between the farm owner and employees further materialises in farm owners control over its workers knowledge, their physical mobility and rights to association and collective bargaining. “Employees are mis- or uninformed about their labour rights by their employers, are, in some cases, only allowed to leave their work- and living environment with permission or supervision of their employer and are discouraged to bargain for improvement in their working conditions or to join a trade union”. Another issue related to the auditing and control process raised by the experts was that, according to them, other institutions and even government officials struggle to gain access to farms for controlling purposes. “It’s a closed environment”, the experts stated. “I would not be surprised if dynamics of ‘bribery and nepotism’ are also at play in these instances”. Furthermore, involved parties will only do something when a wider audience is implicated, “they don't want to see it”. “Fairtrade sounds holy, but it will take an incident before they will look. When it makes it to the media, then they will advocate and investigate”. FT institutions, auditing parties and the government, “will say ‘we didn’t know’, make slight adjustments, and will once again fail to implement and properly control their own standards”. Secondly, the NGO workers denominated several barriers to and demotivating effects of FT certification for farmers in various agricultural sectors wanting to participate in FT. According to the experts, there are high costs of investment needed for eligibility to participate in FT certification and there is an inequity in market access for relatively small independent farmers who want to participate. Smaller volume producers, because of FT requirements, pay relatively higher labour cost per unit produce then larger volume producers which in turn deteriorates the competitive position of an enterprise. For large scale producers the costs for participation in FT certification are relatively low which partially shields them

from new competition and contributes to a reinforcement, and possible differentiation, in their market share. “Its a marketing gimmick”, one of the experts stated. Towards the end of the interview, the experts, on a more positive note, declared that FT certification initiatives are not inherently bad in declaring that there were plenty of examples where reasonable progress was made. Overall, child labour had declined, and the experts spoke of several grassroots- and civil society initiatives maintaining, controlling and educating SA society about FT. Furthermore, they also emphasised that not all farm owners are bad but that of FT affiliated farmer owners, a one sided image exists of an owner that complies to FT rules and requirements with happy employees, without taking into account the complexities of contemporary SA. Summing up, the NGO workers were rather critical on the working and the effects of FT certification in the context of SA wine production. The advantages, although not always framed as benefits, concerned an overall decline in the presence of child labour and the occasional improvement of working conditions and paid wages. On the enterprise level advantages of FT certification lay in its functioning as a marketing tool and protection from new competitors for large scale wine producers. Moreover, on a national/regional level, FT certification led to the emergence of grassroots- and civil society initiatives controlling and educating employees on FT and its modes of conduct. The disadvantages named by the NGO workers were various. On the employee level, FT certification cannot guarantee labour relations according to FT requirement nor did it address existing unequal power relations between employees and employers while it also, due to its revered status, leads to the obscurity of the plight of employees. On the enterprise level the disadvantages concerned the inability of small scale producers to participate in FT because unattainable requirements which also leads to unequal access to the wine market for these actors. Finally, on the consumer level the disadvantage described by the interviewees concerned uncertainty over- or possible deceit about adherence to FT rules and requirements because of in transparency of farmers modes of conduct and inadequate auditing procedures.

Enterprise level - the winery owner The winery owner, for anonymity purposes called Mr. N., has his farm near the Paarl region, northeast of the city of Cape Town. Mr. N. was approached on two occasions. Firstly, after attending a wine tasting at the winery wherein products, production methods, labour

relations and the winery’s background were discussed in the presence of a large group of people. Secondly, a private appointment was made with Mr. N. to discuss his perceptions on FT certification and the South African wine industry. Although the winery in question was not FT certified it was believed that the winery owner, who has been active in wine production in that area for more than three decades, could give valuable insights into the realities of wine production in South Africa’s Western Cape. Mr. N. initially described the context, history and development of his winery, after which he explained that he was not necessarily an expert on FT, but that he did see the wine sector develop in the region and that he, furthermore, had good reasons not to be involved in FT certification. He explained that in the period pre- and just post- abolishment of apartheid, there was talk of FT but that it was still too early to be applied in South Africa, as a consequence of the difficulties and restrictions of the apartheid regime. As mentioned earlier, during apartheid equality in rights, such as equal wages and land tenure rights, did not exist for coloureds and blacks residing in SA. In relation to the present day FT workings, Mr. N. predominantly described certification schemes as barriers for fair and equal participation to the wine market, as in transparent and hard to trust and in some ways stigmatising and denigrating. Mr. N. explained that, in relation to the barrier effect of FT certification, the costs related to obtaining FT certification make it economically unattractive and unfeasible for relatively small scale wine producers to participate in such activities. He described how participation in FT schemes, such as premium housing for staff provided by employers or fees required by FT institutions, require substantial financial capital that small scale farmers do not always have. “Who’s is it?” Mr. N. asked, in pointing out that meeting FT requirements might entail fair(er) trade for his employees but loss of profitability of his enterprise. These costs also create an unfair advantage for large-scale producers that, relatively, have to spend a smaller part of their financial assets to achieve such requirements. In addition to that, as described by Mr. N., large-scale producers are able to produce and supply their produce at a lower-price which in its turn influences the prices that importers and supermarkets are willing to pay for FT- certified and ‘regular’ wines, furthering the disparities in market shares and access between large scale and small scale farmers. A second argument concerning FT relates to the, by Mr. N. perceived, lack of transparency in the setting of rules and requirements for FT certification and its methods of

obtainment and enforcement. Mr. N. made it clear that, in his opinion, no external institution is needed to encourage ‘fair’ treatment of his workers. “Who are they to tell me how to treat my workers or how to be a good man?” Mr. N. stated after which he explained that many farmers, including himself, adhere to many of the pre-set standards for FT certification but are unable to acquire FT certification because of the aforementioned financial barriers. Moreover, Mr. N. described that it was unclear to him where fees paid, to consultants and other professionals and institutions involved in FT, ended up. He stated that it would not surprise him that a large part of the fees paid to these actors might end up being ‘syphoned off for personal gains’, whereby he also underlined the lack of transparency of- and trust in such institutions and professionals. According to Mr. N. the requirements set by FT institutions are in many cases, inapplicable or inadequate for application in the South African context, such as adherence to minimum wage for employees or the provision of ‘premium’ housing for employees, are, in the case of the minimum wage, not tailored to local contexts since the minimum wage is, in Mr. N’s opinion, very low, and in the context of requirements such as premium housing, unattainable for smaller scale farmers because of high costs of investment. In relation to the WIETA certification, another certification scheme present in South Africa and also involving rights of the employees, Mr. N. mentioned that his knowledge on the WIETA scheme was, as with FT, limited. Thereafter, he contacted his head of staff to enquire on the subject. In quoting his head of staff Mr. N. declared that, in a similar fashion as with FT certification, WIETA creates financial barriers and a uneven advantage for large-scale farmers that are capable of affording this scheme, whereby the advantage for large scale producers lays in a guaranteed market share and restricted access to the WIETA certified product market. He also described his all-over distrust in the WIETA scheme for its in transparency and lack of trust in its enforcement and enforcers. Black economic empowerment (BEE), a requirement set by the South African government which involves redistribution of agricultural lands and the creation of ownership among South Africa’s black and coloured society, also did not receive Mr. N.’s, approval. “BEE kind off undermines their dignity”, Mr. N. stated in describing his stance towards the government program. According to Mr. N., farmers that received land as a result of the BEE program are deemed as second rank farmers by fellow farmers, for not having acquired their farmland by own merits but rather by state intervention. “This not only has negative

consequences for the image of BEE supported farmers, as perceived by others leading to envy and contempt, but also harms the farmers self-image and dignity”. In further describing the South African wine production context, Mr. N. explained the unequal entrepreneurial advantage for large scale farmers, as related to “an aggravation of already unequal access to the local and international wine markets”. Large scale farmers, with large pools of economical capital, according to Mr. N., can more easily invest the capital needed to invest in FT requirements while simultaneously, because of their size, large scale producers are less transparent in their practices. Large scale farmers, because of larger volumes of production, are able to bring wine to markets at a lower cost-price and, because of their larger pools of available capital, have access to FT, and other certification schemes. The overall narrative of Mr. N. made clear that institutions involved with FT its rules and requirements seemed as a distant, in transparent practice carried out by a possible untrustworthy institution that sets requirements that are unattainable for small scale farmers and that unequally advantage the already advantaged large scale producers. When confronting him with the perceptions and stance towards FT described by the NGO workers affiliated to EJN, Mr. N responded in a slightly agitated manner. He described how, in South Africa, a stigma exists around white farm-owners and white employers in general. The respondent described how a documentary crew, researching the working conditions on South African wineries, captured images of deplorable working conditions and ‘slave-like’ employer-employee relationships. According to Mr. N., the documentary went on in creating an image where all white farm owners were portrayed in the same way, which led to a stigmatisation of white winery owners. “Do they know all of us?”, followed by “I know plenty of farmers that treat their workers as if they were their own children.” Summing up, the advantage of FT certification named by the winery owner concerned the large scale producers and how they enjoy protection from competition from small scale producers and the privileged access to local and international FT wine markets. The disadvantages on the employee level lie in the, according to the interviewee, too low requirements for wages, namely the minimum wage, and in the context of BEE, the emergence of sentiments of envy and distrust among those under the schemes benefits and those who are not. On the enterprise level, the disadvantages named by Mr. N concerned possible loss of profitability of one’s enterprise due to adherence to FT rules and requirements, an unfair competitive advantage of large scale producers over smaller scale

producers and possible stigmatisation of non FT certified enterprises as being exploitative towards its employees.

7. Comparison of Perceptions on FT certification

The following chapter deals with comparisons made between perceptions on FT certification of the different actors approached for this thesis research. The comparisons were made on the basis of the frequently cited figure 5. Although additional comparisons between retrieved perceptions could be made, for the scope of this bachelor thesis the comparisons were

restricted to the following comparisons. Firstly, a comparison was made between perceptions residing with the Max Havelaar Foundation Netherlands and Fairtrade International with perceptions residing with the interviewed consumers. Secondly, a comparison made was between the perceptions of the two aforementioned actors and the other actors interviewed for this thesis research residing on the Dutch side of the GVC. Lastly, a comparison will be made between the two sides of the perceptions retrieved by all the actors on both sides of the GVC.

Perceptions of Fairtrade institutions compared with consumers Upon review of the in figure 5 displayed perceptions the following can be noted. It becomes clear out of figure 5 that the FT institutions, in comparison to consumers, name a greater number of advantages on the employee and the enterprise level. On the regional/national level both actor groups name the same amount of advantages while on the level of the consumer the interviewed consumers named a greater variety of advantages. Upon review of the disadvantages, visible in figure 5, both parties cited a similar quantity of of disadvantages on the levels of employee and enterprise while on the regional/national and the consumer level the interviewed group of consumers, once again, cited more examples. Focussing on the similarities found in between the perceptions of the aforementioned parties the following was noticed. In comparing the advantages named by both parties it becomes apparent that on the employee level, on subjects related to wages, working conditions and the provision of support and trainings both parties share a similar perception. On the enterprise level similarities were found in advantages named related to prices paid for FT produce and bargaining positions of enterprises. On the regional/national level and the consumer level just one similarity was found, namely, for the former, advantages related to regional economic development and, for the latter, the, by FT institutions named, advantage of being able to do something ‘good’ witch shows similarities to the advantage of ‘peace of mind’ named by the consumer party. Upon review of the similarities in the disadvantages it became apparent that the only similarity on the enterprise level described how for enterprises it can lead to a dependency on external demand which might be a risky investment or negative for one’s competitive position. Focussing on the dissimilarities between perceptions residing with FT institutions and consumers the following came to the fore. In relation to the advantages named, on the

employee level, it was noticed that, firstly, although named in the similarities, the nature of what trainings and support entail for employees named by both parties differs. Furthermore, as visible in figure 5, it is noticeable that the FT institutions name significantly more advantages on the employee level, such as the availability of premiums and the abolishment of forced- and child labour. On the enterprise level it becomes apparent that the focus of the FT institutions lies fully with enterprises on the production side of the GVC, namely with subjects as the protection of enterprises against the free market and were and how premiums are invest, while the consumer perceptions were more focused on enterprises on the consumption side of the GVC, namely advantages related to image and marketing positions and access to a new and growing niche market. On the regional/national level the main dissimilarity in perceptions, between the FT institutions and consumers, lies in consumers describing improvements of region/national labour relations and abolition of exploitation combined with an improvement of regional/national image and bargaining positions, while the FT institutions do not touch on these subjects. On the level of the consumer the main differences in perceptions of both parties resides in FT institutions not naming the, by consumers cited, advantages of being able to set an example or showing of to peers while the consumers did not name the, by FT institutions cited, advantage of FT certification being an assurance of adherence to FT requirements during production of a FT certified product. In comparing the dissimilarities in cited disadvantages, of both parties, it is noticeable that both parties put forward completely different perceptions on employee level. While the FT institutions named the disadvantages of having to be employed by an enterprise adhering to FT regulations and employees being dependent on the will of employers for maintenance of FT standards within the enterprise, the by the interviewed consumers cited disadvantages concerned the emergence of possible conflict over availability and division of jobs under the rules of FT and the inability of employees to be flexible/creative with for example accounting and the division of earnings. On the enterprise level it became apparent that, just as noticed earlier, the focus of the FT institutions is lies on enterprises on the production side of the GVC whereby the cited disadvantages concerned the inner workings of FT certification, while, on the other hand, consumers also focused on enterprises on the consumption side of the GVC in citing disadvantages related to possible reputational damage for enterprises and problems related to niche- clientele and demand.

On the regional/national level it becomes apparent that the FT institutions only name one disadvantage, namely that FTI decides what countries are eligible for possible participation in FT schemes, whereby the group of consumers names several, namely loss of autonomy to external actor(s), the possibility of dependence of FT producing regions/nations on external demand for FT certified produce and a decrease in economic viability/purchasing power for an economy on the consumption side of the GVC. On the consumer level it becomes apparent that in the measured perceptions of the FT institutions there are no disadvantages for consumers as result of FT. The consumers, on the other hand named, several disadvantages, namely, a higher price of FT certified goods in comparison to non-certified products, uncertainty felt about the truthfulness of claims made by FT institutions and enterprises involved with or retailing FT certified products and confusion and in some cases annoyance over the large quantity of different certifications between which a choice has to be made.

Perceptions on the Dutch side of the GVC compared The following section concerns comparisons made between perceptions of all interviewed actors on the Dutch side of the GVC. In comparing the cited advantages as a result of FT certification, on the employee level, it became apparent that all interviewed parties named similar advantages in relation to wages, working conditions and trainings although they differed in more specific ways, namely ambiguity existed about if FT certification guaranteed a higher or just a minimum wages and what the purpose of the supplied training and education entailed. Furthermore, other differences in perception were found in that out of the retailing parties the respecting of collection bargaining agreements were also mentioned while the horizontal dimensions of power named the creation of awareness that could possibly lead to civil and political action as an advantage. On the enterprise level all interviewed parties named advantages related to prices received for under FT requirements produced goods. Furthermore, it became apparent that all but the FT institutions named advantages for enterprises on both sides of the GVC that, mainly, revolved around advantages for company and marketing images and access to niche- markets and clientele. Another difference in perception comes to the forth out of only the consumers and horizontal dimension of power speaking of improved bargaining positions as

an advantage on enterprise level. Furthermore, the horizontal dimensions of power were the sole party naming FT certification as a justification for higher demand prices, as a benefit on enterprise level. On the regional/national level similarities between perceptions existed on the, by all parties except the horizontal dimensions of power named, advantage of regional/national (economic) development resulting out of FT certification. Another similarity lies in the by horizontal dimension of power as well as retailers named advantage of more production processes moving to or being carried out in region/nations where FT produce originates from. Furthermore, another similarity was found between advantages cited by consumers and the horizontal dimensions of power, namely, the advantageous effects FT certification can have on national image and bargaining positions. A dissimilarity lies in the horizontal dimension of power being the sole party to name an increase in transparency and a decrease in corruption leading to more regional and national stability. On the consumer level all interviewed parties named advantages in the trend of ‘peace of mind’, ‘good conscience’, ‘doing something good’ and the gaining of satisfaction through the helping of others. The advantage of contributing to ‘system change’ or a ‘more sustainable world’ were only named by consumers and the horizontal dimension of power. The advantage of good quality products and alluring packaging was an advantage solely named by retailers. On the enterprise level, as visible in figure 5, it becomes apparent that the horizontal dimension of power named the most disadvantages. Furthermore, it becomes apparent that all interviewed parties named similar disadvantages in relation to FT certification leading to dependence on external demand for FT certified produce and aiming to participate possibly being a risky and expensive investment without a guarantee on returns on investment. The disadvantage of possible reputational damage for enterprises on the Dutch side of the GVC was named by consumers as well as the horizontal dimension of power. Lastly, it becomes apparent that the disadvantages of dependence on certification and external actors and the disadvantage revolving around difficulties encountered with rules and requirements surrounding FT were named by the interviewed retailers as the horizontal dimension of power as well. On a regional/national level, all actors except of the FT institutions, named the disadvantage of loss of autonomy, control or sovereignty to an external actor. Additionally,

consumers as well as the horizontal dimension of power both named a dependence on external demand/global export market as a disadvantage. On a consumer level, all but the FT institutions, named an elevated price of FT certified products, relative to non-certified products, and uncertainty about the truthfulness of claims made by FT institutions and or enterprise dealing with FT, as disadvantages. I can also be put that the interviewed retailers are the only ones naming the disadvantages of FT certified good being of lower quality and FT certification leading to a decrease in freedom of choice for consumers.

Comparing perceptions on both sides of the GVC After comparison of perceptions retrieved from the production side of the GVC with those retrieved from the consumption side of the GVC the following was noted. In relation to cited advantages, on the employee level it becomes clear that the named advantages by the all the interviewed parties, in relation to the abolishment of child labour, and to a lesser extent, the improvement of wage- and working conditions showed similarities with those put forth by the SA horizontal dimension of power, although a difference lay in the given that the SA horizontal dimension of power expressed that this advantage was only in some cases existing. It, furthermore, becomes clear that the other views of \ advantages named by the interviewed parties on the consumption side of the GVC were not shared by the SA horizontal sphere of power. On the enterprise level the named advantages concerning protection of large scale producers from competition from small(er) scale producers and a privileged access to the certified wine market enjoyed by large scale produces, were advantages named solely by the winery owner and the SA horizontal dimension of power. Although there are some similarities to the advantage of ‘protection from the free market’, as cited by the FT institutions, the underlying logics behind the formulation of this advantage differ strongly. The advantage of FT certification serving as a good marketing tool for large scale producers/enterprises, as cited by the SA horizontal dimension of power, on the other hand, does show great similarities to the advantages relating to image/marketing of companies and marketing benefits as cited by consumers, retailers and the Dutch horizontal dimension of power. On a regional/national level the advantage cited by the SA horizontal dimension of

power, concerning the emergence of civil society- and grassroots organizations involved with the controlling and education of peoples about FT shows similarities to the by the retailers cited advantage of increased governmental attention for FT principles leading to further diffusion thereof. The difference lay in the given that, as stated by the SA horizontal dimension of power, the initiative for diffusion of FT norms and principles in the by the SA horizontal dimension of power cited example lays with non-state actors. On a consumer level, as visible in figure 5, no examples of advantages were named by the interviewees on the production side of the GVC. In comparing the cited disadvantages resulting from FT certification the following was noted. On the employee level, the winery owner described that a disadvantage lay in that set FT requirements in relation to wages were to low o a requirement to be really beneficial to employees. This cited disadvantage shows many similarities to the by the retailers described disadvantage of FT requirements not motivation or requiring from employers to strive for constant improvement, whereby the set requirements in relation to wages where described as just a minimum. The by the winery owner described disadvantage of BEE, concerning it leading to envy and distrust between different population groups, shows many similarities with the by consumers and NL horizontal dimension of power named possibilities for conflict over availability and division of FT certified jobs, although in the example given by the winery owner it does not concern FT certification. The by the SA horizontal dimension of power cited disadvantage of FT certification not being able to guarantee good labour relations, not addressing unequal power relations between employees and employers and, because of its revered status, in some cases obscuring the plight of employees are disadvantages cited by this party only. On the enterprise level the by the winery owner cited disadvantage of possible loss of profitability of an enterprise as a result of adherence to FT certification rules and regulations is also named by parties on the Dutch side of the GVC, namely the FT institutions, retailers and the NL horizontal dimension of power. The by the winery owner named disadvantage of unfair advantage of large scale producers over small(er) scale producers was only cited by the SA horizontal dimension of power. The final disadvantage named by the farm owner, concerning FT certification leading to stigmatization of farmers unable or unwilling to participate in FT schemes, was only mentioned by this actor. The disadvantage on enterprise level cited by the SA horizontal dimension of power,

concerning FT certification leading to exclusion and or unfair disadvantages because small(er) scale farmer are unable to participate bears similarities to the barriers to participation in FT cited by the retailers on the Dutch side of the GVC.

Conclusions and recommendations

On the outset of this bachelor research the set objective was the answering of the following research question.

- How do perceptions on Fairtrade certification, of actors involved in the global value chain of Fairtrade wine, relate to- and compare to each other?

It was, furthermore, hypothesised that there exists a ‘mismatch’ between perceptions surrounding FT-certified products residing with FT institutions, general consumers and retailers, owners of wineries and involved NGOs. On the basis the previously described thesis research, and the corresponding sub questions, it was aimed to answer the formulated research question and to test the formulated hypothesis. The following was concluded. In relation to perceptions of the investigated FT institutions and perceptions residing with FT consumers it can be concluded that there exists a mismatch between perceptions residing with the Max Havelaar Foundation Netherlands and FTI and perceptions residing with consumers within the specific sample of this thesis research. Although some similarities existed between the perceptions of the two parties in relation to wages and working conditions dissimilarities are several advantages and disadvantages as a result of FT certification were named by the interviewed consumers while not being mentioned by the FT institutions. The differences in perceptions mainly lie, as described in the previous chapter, in the FT institutions fully focussing on the production side of the GVC while consumers, on all levels except the consumer level, named advantages and disadvantages on both sides of the GVC. Furthermore, it was deemed striking that the second, by FT institutions described, advantage on the consumer level, namely the advantage of FT certification granting certainty and assurance about adherence to FT requirements during the production of a certified good,

by consumers was not shard but rather formulated in the opposite way with all consumers naming uncertainty about truthfulness of claims made by, among others, FT institutions. In comparing the perceptions on FT certification between all interviewed actor groups on the Dutch side of the GVC it became apparent that, once again, perceptions on improvements of wages and labour relations are prevalent with all interviewed. What also becomes apparent, is that, also with these actors, general trust in FT institutions and certification practices was low and that disadvantages resulting out of FT certification do not match up with those put forth by FT institutions. Finally, the case study conducted in SA showed that, not only the SA context is a complex one wherein FT certification has varying impacts, the rollout of FT certification programs in SA in relation to wine production or not undisputedly seen as a positive development. As became clear both the winery owner and the SA horizontal dimension of power described several advantages and disadvantages resulting out of FT certification not named by FT institutions pointing towards differing perceptions, while on the other hand, they did show similarities to those put forth by, among others consumers and retailers on the Dutch side of the GVC. Besides the aforementioned conclusions several recommendations at the address of the involved FT institutions were formulated. As described earlier, part of the retrieved perceptions of actors on the Dutch side of the GVC match with perceptions as retrieved from the FT institutions. However it also became apparent that some discrepancies exist in relation to what FT institutions are responsible for, what they provide and how FT certification functions. Furthermore, almost all interviewees, showed a general distrust in FT institutions, FT certification and claims made by actors involved with or dealing in FT products. As mentioned in the theoretical framework, with FT we are dealing with a buyer-driven chain, which entails that consumers preferences are of great importance. Therefore, it will be recommended to the involved FT institutions, namely the Max Havelaar Foundation Netherlands and FTI, to strive for the creation of greater trust in actors involved with(in) FT and in the FT certificate to assure the proper functioning and success of this initiative. Another recommendation stems from perceptions retrieved from retailers on the Dutch side of the GVC. As mentioned before mismatches existed between perceptions of FT institutions and those residing with the retailers. Because retailers are the primary actors with which consumers purchase FT products, and, possibly whom influence perceptions of

consumers, it is seen as imperative that FT institutions attempt to influence perceptions residing with retailers towards a more positive general narrative.

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Perceptions on Fairtrade Certification: Appendix

Table of Contents for Appendix

Figure 1 - Simplified representation of the Global Value Chain for wine Figure 2 - Visualisation of the main research question and sub-questions Figure 3 - Visualisation of operationalisation of perception Figure 4 - Item list Figure 5 - Perception-Comparison table

Figure 1 - Simplified representation of the Global Value Chain for wine

4 Source: Ponte, S., (2007), p.15

Figure 2 - Visualization of the main research question and sub-questions

The image below concerns a visualisation of the main research question and the related sub-questions. The main research question, designated with the letters HQ, is: How do perceptions on Fairtrade certification, of actors involved in the global value chain of Fairtrade wine, relate to- and compare to each other? The main research question is answered through the following sub-questions, designated with the letters SQ. The first sub-question, SQ1, is What does the Max Havelaar Foundation Netherlands/FTI certificate entail according to the organisations promotional materials such as websites and online videos? The second sub-question, SQ2, is: How do perceptions and discourses on Fairtrade certification, and more specifically Max Havelaar certification, take shape among actors involved with Western Cape wine on the Dutch side of the global value chain, namely Fairtrade wine consumers and retailers? The third sub-question, SQ3, is: How do perceptions and discourses on Fairtrade certification, take shape among actors involved with Western Cape wine on the South African side of the GVC, namely winery owners? The final sub-question, SQ4, How do perceptions with actors in the horizontal dimensions of power, namely NGOs and advocacy groups, take shape on both sides of the GVC?

Figure 3 - Operationalization of Perceptions on Fairtrade certification

The figure below gives a representation of how perception is operationalised in this thesis. As described in the methodology chapter of this thesis, operationalisation of perception applied for this research is an adaption of perception by Burnard (1991). The perception of an actor on Fairtrade certification is constituted by the subdimensions of advantages and disadvantages. As described in the methodology chapter, interviewees were asked to name examples of advantages or disadvantages as a result of FT certification on different levels along the GVC of SA wine, namely the level of the employee, enterprise, region/nation and consumer level.

Figure 4 - Example of used item list format

Relation to FT products

● How often purchased on average

● What kind of products generally

● Is FT fair?

Advantages

‘ Could you name an example of an advantage, as a result of FT certification for:’

● Employee level

● Enterprise level

● Regional/National level

● Consumer level

Disadvantages

‘ Could you name an example of an disadvantage, as a result of FT certification for:’

● Employee level

● Enterprise level

● Regional/National level

● Consumer level

Final remarks?

● Specific topic the interviewee dwelled on/was unsure about

● Final message/opinion/view about FT certification?

Figure 5 – Perception-Comparison tables

In the perception of : Advantages of Max Havelaar/ FTI Consumer (NL) Retail participating in FT certification on the level of the:

Employee - (At least) minimum wage - Better/more steady income - Improvements i - Equitable working conditions for all & - Better working - Improvements i enforcement of labour rights conditions/labour relations conditions* (SA) - Investment of premiums in democratically - Support/guidance for - Respecting coll chosen projects better/sustainable company bargaining rights -Transparent & Non-discriminatory practices functioning - No forced-/child- labour - Adequate occupational safety & health conditions* -Stimulation of participation in worker’s unions - Training in collective bargaining

Enterprise - Minimum price guarantee for produce - Image/marketing of company - Company imagi (NL-SA) - Better position in the trade chain, better (NL) - Marketing bene bargaining position - Better/more stable pricing -Increase and div - Protection of the free market (SA) market share (NL - Investment of premiums in development of - Access to new and growing - Guaranteed pric enterprises Niche/Market Share (NL - SA) produce creating - Cooperativve benefits such as reduced - Support: Training/education for further develo investment costs and avoidance of internal for better functioning conflicts and access to communal trainings enterprise - Pre-financing from buyers - Better bargaining position (SA)

Regional-/Na - Regional development through investments - On long term increase in - National and r tional done by participating farmers. economic strength (trickle economic develo (NL-SA) - Economic development of rural communities down/human capital) (SA) beneficial to NL through access to pre-financing - Improvement of - Communal dev regional/national labour - Increase in prod relations + abolition of processes carried exploitation (SA) producing countr - Better for image & - Increased gover Bargaining position (NL-SA) attention for FT p leading to further principles

Consumer - Easily and conveniently ‘doing something - Peace of mind/good - Satisfaction thro good’ conscience of others - Certainty and assurance of adherence to FT - Contribute to a better - Often good Qua requirements during production of certified world/something alluring packagin products. bigger-system change -Setting the right example/Being fashionable / Showing off.

In the perception of : Disadvantages of participating in Max Havelaar/ FTI Consumer (NL) Retaile FT certification on the level of the:

Employee - Have to work at enterprise that - Possible conflict over - Set FT requireme sustains requirements availability/division of FT certified motivate/require co - Dependent on the motivation of jobs improvement (requ employer for maintenance of - Inability/loss of flexibility to adapt are just a minimum maintenance of FT rules and workings of enterprise/division of motivation to striv requirements earnings because of FT control

Enterprise - Minimum Price is determined - Uncertainty for enterprises: - Barriers to partic (NL-SA) by external party reputational damage (NL) (both sides) becaus - Dependent on demand for FT - Niche clientèle and demand (NL) expensive*, to stric certified produce. - Risky investment: Costs/demand (SA) adapt to rules and r - Not always the most profitable - Dependence on external demand (SA) (has to cooperate), way of doing business/Might be - Loss of independ negative for competitive position cooperatives/extern (market) -Dependence on ex - Participation in cooperative demand obligatory -Potential risky inv

Regional-/Nationa - FTI decides what countries are - Loss of autonomy to an external - Increased amoun l (NL-SA) eligible actor(s) (SA) control/loss of auto -Dependence on external demand (SA) external actor - Decrease of economic strength/purchasing power (NL)

Consumer - Higher Price - Higher Price * - Uncertainty about truthfulness claims - Uncertainty abou made surrounding FT claims made surrou - Confusion/Annoyance over different - Quality = lesser kinds of certification/not being able to - Decrease in freed have them simultaneously

In the perception of : Advantages of participating in FT Max Havelaar/ FTI Winery owner certification on the level of the (SA Case Study):

Employee - (At least) minimum wage - Equitable working conditions for all & enforcement of labour rights - Investment of premiums in democratically chosen projects -Transparent & Non-discriminatory practices - No forced-/child- labour - Adequate occupational safety & health conditions* -Stimulation of participation in workers unions - Training in collective bargaining

Enterprise (NL-SA) - Minimum price guarantee for produce - Protection from competition - Better position in the trade chain, better bargaining position large scale producers in the fac - Protection from the free market smaller scale producers becaus - Investment of premiums in development of enterprises their inability to gather enough - Cooperative benefits such as reduced investment costs and capital for investment in FT re avoidance of internal conflicts and access to communal - FT/WIETA certification give trainings scale producers privileged acc - Pre-financing from buyers certified wine market share

Regional-/National - Regional development through investments done by (NL-SA) participating farmers. - Economic development of rural communities through access to pre-financing

Consumer - Easily and conveniently ‘doing something good’ - Certainty and assurance of adherence to FT requirements with certified products.

In the perception of : Disadvantages of participating in FT Max Havelaar/ FTI Winery owner certification on the level of the (SA Case Study):

Employee - Have to work at enterprise that sustains requirements - FT requirement of adherence - minimum wage is too low a req

* BEE: envy/distrust between d population groups

Enterprise (NL-SA) - Minimum Price is determined by external party - Can lead to loss of profitabili - Dependent on demand enterprise - Not always the most profitable way of doing business - Creates an unfair competitive -Might be negative for competitive position (market) for large scale producers who a -Cooperation in cooperative obligatory afford requirements set by FT and because these producers ca of FT produce lower then attain smaller scale producers - May lead to stigmatization if certification is not acquired/app enterprise

Regional-/National - FTI decides what countries are eligible (NL-SA)

Consumer