A guide to Fairtrade and how the FAIRTRADE Mark works

The Fairtrade Foundation was established in 1992 by CAFOD, Christian Aid, New Consumer, Oxfam,
Traidcraft and the World Development Movement. These founding organisations were later joined by
Britain's largest women's organisation, the Women's Institute. The first Fairtrade certified product, Green &
Black’s Fairtrade Maya Gold chocolate was launched in 1994 and was shortly followed by Cafedirect
Fairtrade Coffee and Clipper Fairtrade Tea.

The Foundation is the UK member of Fairtrade Labelling Organisations International (FLO
www.fairtrade.net), which unites 20 national initiatives across Europe, Japan, North America, Mexico and
Australia/New Zealand, and licenses the FAIRTRADE Mark in the UK.

The FAIRTRADE Mark is a certification label awarded to products sourced from the developing world that
meet internationally recognised standards of fair trade.

By participating in Fairtrade, producers are able to use the additional income to strengthen their
organisations and invest in social, environmental and business improvements. Just as importantly, they are
able to learn more about markets and marketing, and take more control of their lives.

A fair price
The first Fairtrade label was launched in 1988 in the Netherlands and applied only to coffee. It was a specific response to the collapse of the world coffee price, which fell for some years to far less than the cost of production, and led to much suffering for coffee farmers and their families.

Today, Fairtrade standards are set for a range of commodities from the developing world including tea, sugar, cocoa, fresh fruits. The standards include a Fairtrade price which covers the cost of production and a
premium which is invested in the local community.

Under Fairtrade labelling, there are two sets of generic producer standards; one for small farmers and
one for workers on plantations and in processing factories. The first set applies to smallholders organised in co-operatives or other organisations with a democratic, participative structure. The second set applies to
organised workers, whose employers pay decent wages, guarantee the right to join trade unions and provide
decent housing, where relevant. On plantations and in factories, minimum health and safety as well as
environmental standards must be complied with, and no child or forced labour can occur.

As Fairtrade is also about development, the generic standards distinguish between minimum requirements
which producers must meet to be certified Fairtrade. Progress requirements also encourage producer
organisations to continuously improve working conditions and product quality, to increase the environmental
sustainability of their activities and to invest in the development of their organisations and the welfare of their
members or workers.

Trading standards stipulate that traders must:
• pay a price to producers that covers the costs of sustainable production and living;
• pay a premium that producers can invest in development;
• make partial advance payments when requested by producers;
• sign contracts that allow for long-term planning and sustainable production practices.

Monitoring
The Fairtrade Foundation, with its international partners, checks that approved products continue to meet
these criteria.

UK companies
Fairtrade can only work if commercial companies are willing to buy from registered producers on these
Fairtrade terms. Those that do can obtain a licence to use the FAIRTRADE Mark on specific products in the
UK, by signing a legal agreement with the Fairtrade Foundation. The Foundation monitors the licensee
companies to ensure that they buy from the registered producers and observe the terms for any product
labelled as Fairtrade. The Fairtrade Foundation receives regular audit reports from the companies, which
detail which producers they buy from, and the prices paid. These are checked with the producers, and
independent auditors are employed to verify the companies’ records.

FAIRTRADE Mark products
Currently, more than 900 retail and catering products from coffee to wine carry the FAIRTRADE Mark in the
UK. Retail sales of Fairtrade certified products are increasing by over 40% each year:

The Fairtrade Foundation
Room 204 16 Baldwin’s Gardens
London
EC1N 7RJ
t: 020 7405 5942
f: 020 7405 5943
w: www.fairtrade.org.uk