Readers' Letters from Ethical Consumer Issue 155
Direct Trade vs. Fairtrade
We were disappointed to read your comment on Direct Trade (EC154 Fairtrade and its discontents). Union Hand-Roasted Coffee has been pioneering this model of coffee sourcing for 15 years. Union Direct Trade is an effective model for sustainable development, in comparison to established schemes like Fairtrade. Your article states that “direct trade cannot be viewed as giving the same kind of price support as Fairtrade’s price premiums provide.”
Our minimum price (Union Direct Trade floor-price) is 25% greater than the Fairtrade minimum price, plus we also pay the equivalent Fairtrade social premium. You also state that “growing connoisseur quality coffee incurs extra costs for producers. They may be paid more for it, but it isn’t clear how much better off they end up”. In our model, we correct for the increase in cost of production for preparing high-quality coffee by providing this high floor-price, and then building further payments on top of this because farmers receive additional payment as quality premiums.
You also propose that “The concept is simply based on dealing with independent farmers directly and paying top prices for top quality products…” However, the majority of the coffee we source (85%) is produced by small-scale farmers of which many are ‘unorganized’ smallholders, making them ineligible for participation in Fairtrade which is restricted to Co-operative organizations. Our model provides market access to a diverse range of producer types, sharing a set of quality standards. These include the capacity to produce high-quality coffee and a set of social criteria defined by the Ethical Trading Initiative (ETI) on labour standards. Download our code of conduct.
Critics highlight the weakness of Direct Trade is not having 3rd party accreditation, plus no formal definition. For this reason it is important that Union Direct Trade is defined and communicated accurately because we have an established track record which is transparent and fully traceable. Producers we source from are clearly identified. Consumers can know where our coffee comes from because there is nothing to hide – anybody can talk to these farmers.
This is why transparency and traceability is so important. We dedicate significant time and resources to implement Union Direct Trade; we’re in the field visiting producers for the majority of the year. We monitor and evaluate working conditions, environmental criteria and the actual price received by the farmer (farm-gate price). We go to these lengths because one of your criticisms targeted at us could equally apply to Fairtrade, “it isn’t clear how much better off they end up”. Our approach is dynamic engagement, where conversations with farmers can improve livelihoods, compared to a static a tick-box approach employed by the certification schemes.
Steven Macatonia, Director,
Union Hand-Roasted Coffee
An ethical caffeine-fix conundrum
I have an ethical dilemma. I was recently given a Nespresso coffee machine as a gift. It uses pods, which are not good from a resource-use perspective, but I am keen to make use of the machine. I have looked into the different options available and am torn between the best ethical practices of the different companies. Cafédirect offer fair trade coffee in their pods but the capsules are plastic and not easily recycled.
The Nespresso brand is not one that I wish to support but their sustainability report looks ok and their pods are all aluminium making them much more recyclable. They also provide free recycling bags to send all the pods back at no charge. What is Ethical Consumer’s advice? Which is better, supporting fair trade coffee or better recycling?
Chris Rogers, by email
Ed: As you are probably aware Nespresso is a brand name of Nestlé, which has had one of the longest running consumer boycotts regarding their promotion of baby formula over breastmilk,
particularly in Africa. In terms of the coffee, Cafédirect sources 100% Fairtrade Foundation certified from smaller farmers and growers’ co-ops. Nespresso has its own AAA Sustainable Quality mark for 68% of their coffee – which forms part of their Ecolaberation programme, “implemented and monitored in partnership with the Rainforest Alliance”. Fairtrade wins over Rainforest Alliance because it guarantees a minimum price for coffee producers (see Coffee Shops guide, Issue 154). The environmental impact of easily recyclable aluminium pods verses plastic, would require an in-depth assessment of resource inputs to the life-cycle of both products. Our view would be avoid Nespresso due to their wider ethical record, and choose Cafédirect and look for local opportunities for the recycling of mixed plastics.
The fog of branding
I have always boycotted Nestlé and have recently been told by a friend that they have taken over Cadbury. She works in catering and recently switched her ice cream supplier so that they are supplied by Cadbury (we live in Birmingham and despite Kraft takeover she wanted to support our local company). She booked for a Cadbury rep to visit re: the supply of the ice cream but a Nestlé rep arrived and now Cadbury ice cream is supplied but the invoice comes from Nestlé. This makes no sense to me as I can’t find anything online about any takeover or working together and you haven’t mentioned it on your website (though I note that some call for a Cadbury boycott due to tax reasons). I wondered if you could you please let me know any further details you may have.
Sian Haydon, by email
Ed: Nestlé has not taken over Cadbury. R&R Ice Cream produces ice cream under the Cadbury and Nestlé brand names. It bought Nestlé’s ice cream business in 2001 so owns that outright and uses the Nestlé brand name. For Cadbury, it has the license to produce Cadbury-branded ice cream. We presume that the rep had a Nestlé logo because R&R has the licence to use the Nestlé ice cream brand. We are updating our guide to Ice Cream in the next issue, due out in August, so watch out for that.
A gift of tax avoidance
An Amazon voucher was recently offered to me as a ‘reward’ for purchasing home insurance from Nationwide. When I raised this as an issue the very polite young salesman seemed a little taken aback at my dismay.
I explained it such: I had joined Nationwide on account of its high ethical rating in Ethical Consumer magazine. Amazon is a tax avoider and also has a dismal record in its treatment of its workforce, not just in the UK but elsewhere. I therefore would not accept it.
I said a more appropriate ‘reward’ would have been a year’s subscription to the Ethical Consumer magazine. He had never heard of it so I asked if he would pass my suggestion to his marketing department. As I heard nothing further I thought to check for myself that my suggestion had indeed arrived at the marketing department.
But I wanted to check with EC first, in case it had been taken up and enquiries from Nationwide had been received. They had not and the contact at EC said they would look into this and let me know. Nothing was heard for a while until a young Nationwide lady contacted me a couple of weeks later. She had been asked by someone in another department to find out if I wanted to lodge a complaint. Her remit clearly did not entail listening to what I had to say and she tried to explain why Amazon vouchers were offered (general appeal to our customers, Nationwide carefully reviews providers, etc.). I had to cut her short, I’m afraid, because I had never asked why Amazon vouchers were offered; only why an ethical bank would do so.
Brigitte Lechner, by email
Ed: Thanks for your email Brigitte. It’s really great that you took the time to challenge Nationwide’s policies and plug Ethical Consumer at the same time. We do hope that others will follow suit!