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

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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 2 ● 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 3 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” 4 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 5 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
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