This is the continuation of a previous post that mainly looked into the current status of fair trade trends in Europe and the issues arising multiple, non-coherent labeling consequence of the non-existence of a single pan-European fair trade (or fairtrade) label.
In this post I’ll be looking at market and consumer paradoxes and some of the commercial trends that are surfacing.
The big mix up: Fair trade = charity vs. luxury = good business
Sadly this is an exploding time bomb that has been planted by – you guessed it – the fair trade movement itself.
How? Focusing on the good our (mine, your) buy does for an estranged third person is inducing guilt to the consumers. Guilt, this is very old news, only sells on the very short term. The way fair trade historically was pitched to us consumers was probably THE mistake of a generation.
What few are conscious of: The only way how to make a more expensive product – which it a fair trade product is – is commercially viable and interesting for the buyers is … if it is quality at the very least in the top-tier. Fair trade hence, would in fact have all the ingredients for a luxury product: traceable supply chains, quality products, a lot of hand-work involved, low quantities produced on a global level (kind of a ‘limited edition’). The fairtrade movement is – so it feels – short selling a luxury product in favour of reach the mass markets of uneducated, disinterested consumers out to by the cheapest thing they can get.
This would be akin to Chanel lowering prices to Primark prices because that’s where the masses are. Who’d ever proposed such a market strategy would be very quick reaching the end of his career.
Interestingly, fair trade (fairtrade) products, stores and brands have been going out of business by the dozen, or faced serious financial problems.
Yet, paradoxically, the luxury sector is increasing its turnovers and market shares in Europe despite the ongoing economic woes of the Euro zone and beyond.
Conclusion? Rather then talking about fair trade products, we should be talking about exclusive products, many hand made, certainly with limited availability, at the top of their league in quality. Let’s talk luxury. Let's talk about quality products. Quality is the one key luxury that every one falls for. Not guilt, and not the lives of people we mostly don’t know.
Let’s make ‘what is good for us, is good for them’ make a difference.
And I repeat: not guilt.
Traceability is the name of the game … and quality stays with us
On a pan-European level, sections of the Geo Fair Trade project approach what for every buyer of products will, without a single shade of doubt, be the one major area of work in the future: tracking where your products have travelled from and how they have been made.
Walmart and Marks & Spencer have proven that indeed the big retail giants are gearing up, and pragmatically speaking, fair trade cannot not follow.
Only: fair trade supply chains are, at least in theory, more transparent by definition, as there should be many fewer layers of middlemen that could spoil it. The Geo Fair Trade project hence comes just ahead of the big waves which are oncoming. Of which there would be?
- France: Eco & carbon foot print labelling required as per 07/2011 (trial), to come into definite effect as per end of 2012
- Britain: Bribery Act 2010 (c.23), which will have global jurisdiction as long as a company does some business in the UK.
- EU: Regulation (EC) No. 1907/2006. Abbreviated ‘REACH’ (Registration, Evaluation, Authorisation and Restriction of Chemical substances). Obviously does not only apply to commercial business (notably in the fashion arena) but also to fair trade businesses and products.
- EU: Laws in relation to when a product can be called ‘Made in …’. Recent examples: Italy.
- US: Tort case law which is a tedious issue, but essentially allows US authorities to prosecute any person or company provided they have some relationship with the country, and the act has been committed voluntarily. This case law has been invoked successfully for human-rights infringements of international consortiums.
- US: California Transparency in Supply Chains Act of 2010 which requires the disclosures on corporate efforts to eliminate slavery and human trafficking for any one business with links to California. This btw. includes mere retailing of elsewhere produced goods.
… which all come on top of initiatives such as e.g. the banning of Utzbek cotton (how, as a buyer, do you know that the ready-made-and-produced garments you buy, don’t contain any. Tricky indeed it is …).
The good thing is, the side effect of mapping out and tracing products across entire supply chains will result in less waste (because finally! the data is available), more accountability (because no one can claim any more that they didn’t know), lower production costs (because inefficiencies can be ironed out) … and, strange is it not?, higher overall product quality. Because suddenly it’s known not only where the problems are but also what they are. And what has a name and a definition has got a solution.
No wonder initiatives like ‘Buy British’ – or its peers in France, Italy, Spain, Switzerland, Germany, Austria, Norway, Denmark, Ireland, Holland etc. – are back in fashion. Local supply chains are ways easier to track.
… but not all is good in the land of … certification
To make it brief: fair trade has not been known for either transparency nor consistency in uncovering or admitting their own short comings. Non-compliance of certified producers have in the past habitually been brushed under the carpet. Supposedly because it would damage the certification authority’s reputation.
Let me just say: I’m critical of this argument for the same reason I’m critical of the gems mining company De Beers claiming that no blood diamonds go through their fingers. Why should they admit. Everyone knows. Admitting makes it even worse. Cleaning up is ways too messy, so why bother.
This in fact is going to be real challenge the fair trade movement will be facing, or probably already is: Covering up cases where their goals are undermined back fires. And once you’ve lost your credeibility and the word about dishonesty is going around, the game’s over.
