Monday, 9 July 2012

Fairtrade - like charity - should begin at home

I have been pondering the implications of the spat between the British dairy farmers and the supermarkets. For those who missed it, on BBC Radio 4's Today programme last week a spokesman for dairy farmers claimed that three of the large supermarkets have driven down they price they pay for milk to the point where it's no longer possible for the farmers to make a profit. Note that not all supermarkets are implicated: Tesco, Sainsburys and Waitrose are apparently playing fair. But there's more than a little irony - and perhaps even a smattering of double standards - in the list of those named and shamed.

Morrisons was not a big surprise - it has a price-led brand strategy and makes no particular claims of leadership on either the environment or ethics. Asda is equally price-conscious, but given that its name is a contraction of Associated Diaries and it was originally farmer-owned, might be expected to defend farmers' interests. However, it's now wholly owned by Wal-Mart and the name is the only remnant of its heritage. Wal-Mart does make strong claims for its supply chain ethics. The big surprise for me was Co-op - with its strong and long-standing emphasis on fairtrade, I would have expected a fair deal for its suppliers at home as well as overseas.

Co-op has responded to the criticism with a commitment to increase the price paid to dairy famers from 1st August - a commendable move that is consistent with its brand values. It has also emphasised the other ways in which it supports farmers, like contributing to veterinary costs and funding efficiency and carbon reduction programmes. Morrisons has defended its milk pricing model and plans to stand by it, and Asda has remained silent.

Judging by the comments under The Grocer's story on this issue, many consumers intend to vote with their feet, switching their entire supermarket shop to stores whose policies they view as fairer. As a vital component of most people's diets, milk seems to have become the new yardstick used to judge price competitiveness in these economically-constrained times. But we shouldn't forget that livelihoods depend on the fair treatment of suppliers - perhaps the gross profit made by supermarkets is a more equitable metric for demonstrating the value for money they offer?

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