Fairtrade sales hold steady despite supermarket price wars

Fairtrade groceries

Despite deflation in the grocery sector, early estimates based on the first three-quarters of the year suggest Fairtrade sales held steady in 2014

  • Volume of UK retail sales of Fairtrade products up 2% for Q1 – Q3 2014
  • Estimated value of UK retail sales of Fairtrade products down 2% for Q1 – Q3 2014
  • Sales growth for Fairtrade flowers, vegetables, honey and olive oil

Despite deflation in the grocery sector, early estimates from the Fairtrade Foundation based on the first three-quarters of the year suggest that Fairtrade sales have held steady in 2014.

During the first nine months of the year there was sales growth in a number of product categories, including Fairtrade flowers, for which sales volumes grew by 29% compared with the same period in 2013. Sales volumes for coffee, bananas and cocoa also increased, while sales volumes for other popular product categories such as tea and sugar were slightly down year-on-year.

For most commodities, Fairtrade producers earn at least the Fairtrade Minimum Price for their produce, or the market price if higher, and they also earn a Fairtrade Premium, which is based on sales volumes. This means that even if retail prices fall, Fairtrade producers are protected from the immediate impact of price deflation as long as the volumes sold remain steady.

“2014 has been one of the most challenging years yet for the grocery sector, as several of the major supermarkets have engaged in price wars. Despite this, Fairtrade sales are holding more or less steady, and they continue to make a significant difference to the lives of farmers and workers in developing countries, as well as their families and communities. Without the efforts of the Fairtrade movement, producers would be at the mercy of the free market, but with the Fairtrade system, the poorest producers are protected from the savage vagaries of the volatile retail environment. Thanks to the UK consumers, retailers and companies that support Fairtrade, they are supported to work their way out of poverty and build a more sustainable future,” says Michael Gidney, Chief Executive of the Fairtrade Foundation.

To make an even greater difference to the lives of farmers and workers, Fairtrade is introducing a number of new business initiatives in 2015, which aim to increase the volumes that producers can sell on Fairtrade terms. Revised standards for Fairtrade Gold will be launched in January, a New Services Team has been created to develop new business initiatives, and Fairtrade Sourcing Programs in cocoa, sugar and cotton, developed in 2014, will be rolled out in 2015 so that, for the first time, companies have two ways of engaging with Fairtrade  – either the existing route where their finished product can be certified and labelled with the FAIRTRADE Mark, or they can commit to sourcing a certain amount of cocoa, sugar or cotton on Fairtrade terms under the new Fairtrade Sourcing Programs.

Fairtrade Foundation will announce its estimated sales for 2014 during Fairtrade Fortnight (23 February – 8 March 2015), when fourth quarter sales figures are reported by the companies that sell Fairtrade products.

Source: www.fairtrade.org.uk

 

 

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