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End of the line for Fairtrade?

Global sourcingFood and beverageConsumer goodsCorporate social responsibilityEthicsCSR PoliciesLow Cost Country SourcingBlog+-
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In 2009 confectionary giant Cadbury made a pledge that the cocoa used in its popular Dairy Milk branded chocolate would be made from Fairtrade certified cocoa, an independent standard that was set up to try and boost the earnings and livelihoods of cocoa farmers.

 

At the time it was hailed as a major step forward, one that would help develop farmers across the world.

 

This week however, Cadbury, which is owned by Mondelez, announced plans to abandon Fairtrade in favour of Mondelez’s own in-house scheme called Cocoa Life.

 

The issue at stake here is not whether Cadbury is rowing back on its sustainability commitments, it is whether standards, such as the Fairtrade model, are outdated and whether it is better for businesses to go their own way.

 

It was a move that was met by criticism, with some going so far as to call it the great ‘Cadbury fudge’.

 

Fairtrade was introduced at a time when corporate social responsibility (CSR) was found way down the corporate agenda.

 

Today, though, businesses are taking more interest and more control over their own CSR policies.

 

Critics argue that it is simply a case of sidestepping shared ethical standards, but Mondelez itself argues that its own regulations are much better for small cocoa farmers.

 

Mondelez’s Cocoa Life scheme, for example, does not have a price rule for farmers. The Fairtrade certification scheme meanwhile stipulates that cocoa farmers earn a minimum of $1,600/tonne.

 

But Glenn Caton, northern Europe president at Mondelez, told the BBC that "sustainability is about much more to us than price".

 

Mondelez has taken the mindset that rather than simply paying farmers more, the company should invest in the wider supply chain because this will improve conditions throughout the supply chain.

 

"The next generation of farmers aren’t taking on cocoa farming like they used to because it is so unprofitable, so we have to make sure their communities thrive and this means investing more in their communities," Caton said.

 

So does this spell the end for Fairtrade and other such labels which act as a symbol of ethical supply chains?

 

With Cadbury’s being such a big player in the cocoa and confectionary market, this could start something of a domino effect with other organisations following suit and establishing their own standards.

 

As long as a focus on sustainability remains and the agenda continues to be pushed forward it doesn’t necessarily matter whether that is being done in-house or as part of a wider group. The trouble will arise if those standards vary wildly, meaning that suppliers have to spend more time and resource trying to meet those rather than on growing and producing.

 

This article is a piece of independent writing by a member of Procurement Leaders’ content team.

Rachel Sharp
Posted by Rachel Sharp

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