In January 1994, the European Parliament adopted a report and a resolution promoting fairness and solidarity in North-South trade. The report recommends measures to strengthen and support the fair trade movement and to adopt the fair trade principles in policies of the European Union and its Member States. The European fair trade movement considers this as an important acknowledgement of its almost 30 years of fair trading and campaigning.
In 1959, the Fair Trade Organisatie (formerly called: S.O.S. Wereldhandel) was founded by a number of youth members of a Catholic political party in the Dutch town of Kerkrade. Concepts such as developing countries or the Third World were unknown in those days. The foundation's first activity was a milk powder campaign for Sicily. Fund- raising and providing financial support to projects in 'underdeveloped regions' were the main activities.
The young foundation focused on projects that would allow people to gain economic independence by helping them to support themselves. Financial support was therefore mainly aimed at vocational training and small workshops. It soon became clear, however, that selling the manufactured products was a major problem. The sales potential of the small local market was insufficient. This led Fair Trade Organisatie in 1967 to become a pioneer in purchasing products from producer groups in developing countries and selling them in Northern markets. The world's first fair trade organization was born.
The first imported products were wood-carvings from the slums of Port-au-Prince, Haiti. During the first few years, only crafts products - the majority of them from missionary projects - found their way to the Netherlands. Cactus pots, plant hangers, bamboo ashtrays and shell-decorated articles from the Philippines, earthenware and straw products from Mexico, sandals from India and wooden sculptures from Haiti were characteristic of the first range of fair trade products. These products were sold through (missionary) exhibitions, mail order and Third World Groups.
Autumn 1973, coffee was introduced in the fair trade circuit. The first beans came from Fedecocagua, an association of coffee cooperatives in Guatemala. The coffee led to an enormous acceleration of the growth in fair trade, and coffee turnovers exceeded those of handicrafts shortly afterwards.
From the early 1970s onwards, the fair trade model was adopted in a number of other European countries. Since then, over 65 fair trade organizations all over Europe have started operations. 11 of them in 9 European countries joined forces in 1990 by establishing EFTA, the European Fair Trade Association. EFTA seeks to stimulate practical cooperation between its members, develop common policies and offer joint support to producers, and strives for the adoption of fair trade principles in commercial trading in Europe. EFTA members import from over 550 producer groups. Total turnover of all EFTA members together has been growing steadily for years and in 1994 ammounted to some 72 million ECU. EFTA members employ a total of approximately 560 staff and are supported by tens of thousands of volunteers.
The UNCTAD conference concluded in 1968 that "not aid but trade" would be the best method of development assistance. However, this statement was not put into practice; the political will to apply the concept in reality was lacking. Third World Groups set a better example. The sale of cane sugar became a form of political protest, as appears from the slogan "By buying cane sugar, you increase the pressure on the governments of the rich countries ... to give the poor countries also a place in the sun of prosperity".
The Cane Sugar Groups developed into "World Shops", which not only sold cane sugar but also handicrafts products. The first real Third World Shop was established in 1969 in a small town in the Netherlands. In the ensuing years the "World Shop" idea rapidly became very popular. In the early seventies, (Third) World Shops sprung up all over Europe.
In various countries, the shops united to form national associations. As the continuing growth of the world shops movement required coordination on a European level, these associations started meeting at bi-annual conferences. In February 1994, 15 world shops organizations (representing almost 3,000 world shops in Europe) from 13 countries decided to institutionalize this cooperation and established NEWS, the Network of European World Shops. The aims of NEWS are to exchange information, coordinate activities, organize bi-annual European congresses and link grassroots activities with advocacy work.
By the end of the 1980s, the growing importance of the fair trade importing organizations and the world shops led to increasing consumer interest in fair trade, and increasing willingness to buy fair trade products. It became clear that this consumer interest could be mobilized to put pressure on mainstream commercial companies to include fair trade products in their product range.
At the same time, churches and other community organizations discovered fair trade and fair products as an effective way to deal with global problems in the fields of inequitable South-North trade and ecological deterioration. In Autumn 1986, a national coffee campaign, conducted in the Netherlands by the Dutch NGO Solidaridad and others, tackled the Dutch coffee roasters about their coffee purchasing policies. Capitalizing on the growing consumer awareness, a group of organizations introduced the Max Havelaar labelling initiative successfully on the Dutch market in November 1988.
Soon after the establishment of Max Havelaar in the Netherlands, similar fair trade labelling organizations were founded in other countries with various names and/or logos. In 1992 TransFair International was established, using one international logo in all countries where TransFair organizations are present. The various labelling initiatives cooperate on criteria and producer registers.
Today, the following products with a Fair Trade label have been launched on the market in one or more of the participating countries: coffee, cocoa, chocolate, honey, sugar and tea. More are to follow. The market shares differ per country and per product, but on the whole they vary between one and five percent and show a steady growth.
| import organizations: | 65 |
| wholesale organizations: | 80 |
| retail channels: | |
| world shops | 3000 |
| commercial shops (incl. supermarkets) | 13000 |
| chains of supermarkets | 30 |
| points of sale: | 45000 |
| staff: | 1500 |
| trademarks: | Max Havelaar, TransFair, FairTrade Mark |
| budgets for education & PR: | 7 million ECU |
| wholesale turnover: | ca. 160 million ECU |
| retail turnover: | ca. 200 million ECU |
| market share of coffee: | 1.4% (European average) |
Fair trade import organizations buy products from democratically organized producers in the South, paying them a price for their products that enables them and their families to make an adequate living. Fair trade organizations also assist producers in product development, education and training, improving their organization and marketing and allowing them to share their skills and experience with others. In Europe, fair trade import organizations sell their products through so-called (Third) World Shops, local groups, exhibitions, campaigns, wholesale and mail-order catalogues. They inform buyers about the producers and their products by means of pamphlets and booklets accompanying the products, slide presentation, exhibitions, magazines, informative meetings and training courses. They cooperate with other Third World organizations, trying to give people in the South a fair chance and a fair share of the earth's resources.
(Third) World Shops sell products, initiate information activities, exhibitions, educational programmes for schools and conduct joint campaigns. They invite industry and trade to adopt the fair trade model by, for instance, putting a number of certified fair trade products on the market or by organizing political campaigns aimed at the abolishment of European protectionism. World shops cooperate on local, regional, national and international levels, supported by their National Associations.
Fair trade labelling initiatives aim to enlarge the market for fairly traded products by offering these products to the mainstream market (supermarkets, etc.) and at the same time giving consumers an independent guarantee of fair trade standards. The conditions to be met by traders in order to be permitted to label products are laid down in fair trade product criteria. TransFair International (representing national TransFair organizations in Germany, Austria, Luxembourg, Japan, Italy and Canada), together with Max Havelaar (in the Netherlands, Switzerland, Belgium, France and Denmark) and FairTrade Foundation (in the UK) usually work and agree jointly on specific product criteria.
Fair trade by now is a well-known concept in almost all countries in Western Europe. Hungary apparently is the first Eastern European country where fair trade is introduced (the first Third World Shop will be opened in P‚cs). Although not included in this survey, it should be stated that many countries outside Europe (the United States, Canada, Japan, Australia, New Zealand, etc.) also have sizeable fair trade sectors.
Fair trade - i.e. trade starting from small-scale Southern production groups and seeking to make an equal South/North exchange - is a concrete form of development cooperation. The experiences of numerous producer groups show that fair trade is effective and allows the partners to improve both their economic and social position. In Europe, it attracts increasing numbers of consumers, as evidenced by the rapidly increasing turnovers. The extent and impact of fair trade differs per country, depending on by the "age" of the national movement rather than the size of the country. In other words: the older the movement, the more impact it has in the country. In most European countries, fair trade grows by 10 to 25% per year.
It is essential for fair trade to continue to expand. There is still a considerable gap between actual turnover and potential turnover. In all European countries, sizeable consumer groups declare that they are prepared to pay 10 to 20% more for fair trade products. The question is how to reach them in the market. This requires the further professionalization of fair trade, applying techniques from the fields of marketing, information and PR, business economics and management science. The fair trade movement should take more steps in this direction. Giving information and conducting campaigns will also largely remain the responsibility of the fair trade movement. It will have to ensure that it keeps the fire burning, adheres to its principles, explores the opportunities for new products and markets and continues to be a pioneer. This requires money and professional staff!
Regarding the South, it is important to provide intensive guidance to the producer partners, where necessary. Trade is of vital importance, but for weaker partners trade alone is often not sufficient to develop towards independence. The fair trade movement therefore intends to further expand its support to producers as regards product development, quality improvement, efficient production organization, and to transfer knowledge on administration, cost control, marketing and management.
At the same time, greater weight should be attached to the political aspects: mobilizing the supporters of fair trade and making use of the power of consumers. From the developments in the past five years, it is evident that politicians and businesses are highly sensitive to the viewpoints of large groups of voters or consumers. The starting point should be the combined efforts of as many like-minded national and international organizations as possible, directed at particular key issues and translated into intensive campaigns. Setting the example, providing information, initiating action and cooperating in networks is equally important as exerting political pressure and lobbying.
Through the impact of its own activities, by setting an example and by introducing fair trade principles in regular trade - by means of labels, lobbying and (political) pressure - the fair trade movement will make an increasing active and structural contribution to the fight against poverty.
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