History of Fair Trade

The history of Fair Trade can roughly be divided into four waves: In the beginning the need for an alternative trade concept was acknowledged after the end of the Second World War when charity organizations in Western Europe began to establish trade with producers in Eastern Europe. At this point mainly handicrafts were imported in order to support their economic recovery. Concurrently, awareness was raised by the Mennonite Central Committee which began to import embroidery from Puerto Rico that was sold through the Self Help Crafts of the World organization now known as Ten Thousand Villages.

Following these early pioneers, more and more alternative trading organizations (ATOs) came into being such as Gepa in Germany and Traidcraft in Great Britain. Some of them had a religious mindset, others were based in community organizations that believed in using a business mindset to address some of the social problems worldwide. These shops gave the producer the possibility to trade directly with the companies, thus cutting out the middlemen who are responsible of reducing prices for the producer. The sale mostly worked through world shops and special catalogues.

The third wave of development promoted Fair Trade products to a larger consumer base by involving sympathetic retail businesses. Among the first cooperative businesses were Wild Oats Markets in the US and the Co-operative Group in Great Britain.
The integration of Fair Trade products into mainstream shopping culture was facilitated by the introduction of Fair Trade certification. During this time, traditional players such as Sainsbury’s or Starbucks were encouraged to enter the market. However, they remain up to this day only partly Fair Trade (Dean's Beans). It is also worth mentioning the emergence of supermarket own-label Fair Trade products such as Tesco in Great Britain.

Fair Trade sales are growing fast worldwide from 21% in 2002 to more than 40% in 2003 for Fair Trade labeled products (FLO, 2003).
Fair trade has developed into a European success story as the recent survey Fair Trade in Europe 2005 - Facts and Figures on Fair Trade in 25 European countries, carried out by Jean Marie Krier, and published by the Fair Trade Advocacy Office in Brussels, shows. Sales in Europe have been growing at an average of 20% per year since 2000. The annual net retail value of Fair Trade labeled products now exceeds € 660 million in Europe. The figures, which have doubled since five years ago, show that Fair Trade is now one of the fastest growing markets in the world. More than 2,800 Worldshops across Europe, that stock almost exclusively Fair Trade products that are imported by 200 Fair Trade organizations, work with about 100,000 volunteers all over Europe.

Furthermore, Fair Trade is integrated into mainstream shopping culture with 55,000 supermarkets all over Europe offering their customers Fair Trade products. 47% of all bananas, 28% of the flowers and 9% of the sugar sold in Switzerland are Fair Trade labeled. In the UK, a market with eight times the population of Switzerland, these products have achieved a 5% market share of tea and a 20% share of ground coffee.
If the US market development follows the European global sales of Fair Trade products, it will most likely increase by a factor of 10 -15, topping $1.8 billion by 2007 according to D. Demetriou who’s article “Consumers embrace ethical sales, costing firms £2.6bn a year”, was published in The Independent, on December 9, 2003.

The increase in the market for Fair Trade is due to an interrelated net of political, academic, cultural and informational influences. The growing political impact of Fair Trade groups has become visible at both national and international level. The symposium on Fair Trade, part of the 2004 UN Conference on Trade and Development (UNCTAD) meeting that took place in São Paulo, generated the São Paulo Trade Declaration that actively challenged UNCATD to support the management of world commodity markets and encourage increased trade price stability.

One of the most significant influences is the evolution of the consumer’s consciousness, the movement of ethical consumerism. The key criteria for successful brands have changed from the pragmatic price- and value-driven imperatives towards real values, from Tesco to Body Shop. Moreover, it has become widely acknowledged that neither development aid nor foreign direct investment (FDI) are sufficient to balance the inequalities between the North and the South.
Kofi Annan referred to the idea of “Trade not aid” as an excellent way to alleviate poverty in the article “A route out of poverty”, The Financial Times, March 5, 2001.
The Fair Trade movement gives one example of how this can work. Fair Trade has undoubtedly expanded into a worldwide movement, benefiting more than five million producers, their families, and communities in developing countries.

For more information please refer to:
Nicholls, A. & Opal, C. (2004) Fair Trade Market-Driven Ethical Consumption. London: Sage. Chapter 1.

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Photopgraphed by Marcia C. Schenck, South Africa 2003 & 2006