This report summarizes the evidence of unlawful actions in the marketing of
Fairtrade, and of actions which support the unlawful actions. The actions mean not only that generous British consumers are being cheated out of £100 million to £200 million a year, but also that money meant for poor farmers in the Third World is being pocketed by firms in
Britain, which inevitably causes death and destitution (Griffiths P. , 2012, p. 358). In some cases it is clear who should be prosecuted, but in others legal advice is required on who can be. The apparent offences disclosed include particularly that of Unfair Trading under the
Consumer Protection from ‘Unfair Trading’ Regulations 2008, but also offences under The
Business Protection from Misleading Marketing Regulations 2008, and the ‘Fraud’ Act 2006, among others.
The evidence from a wide range of researchers has been reviewed and analysed in detail in the top academic journals on the subject (Griffiths P. , Ethical Objections to
Fairtrade, 2012; Griffiths P. , Fairtrade: comment on Tedeschi and Carlson, 2013) and forthcoming publications (Griffiths P. , Fairtrade, Unlawful Behaviour, Ethics: Controlling the
Discourse, 2014b; Griffiths P. , Unlawful Conduct, Ethics and Fairtrade: Ethical Obligations of the Brand Owner, 2014a). Nobody has challenged the facts or the analysis in the published articles. The articles are attached, and I should be happy to help anyone wishing to see the sources of the facts reported.
My qualifications to comment are as follows. I am an internationally known agricultural economist who has worked on marketing from small farms in Africa to the supermarket shelves of firms like Sainsbury’s. I have been employed by the UN, the World
Bank and the EC as well as by many national governments on this. I have doubled or quadrupled the net cash income of hundreds of thousands or millions of farmers. I have even prevented a famine, as shown in my book (Griffiths P. , 2003). I have excellent qualifications and an outstanding research and publication record.
Fairtrade is a certification brand giving the consumers an assurance that the product has been produced and marketed in accordance with the standards laid down by Fairtrade
International (often called Fairtrade Labelling Organizations International). In particular there is an assurance that a minimum price is paid to the exporting firm, and that there is an additional payment called the Fairtrade Social Premium. Audits of the production and marketing in the producing country are carried out by Fairtrade International’s subsidiary,
FLO-CERT. In the UK the Fairtrade Foundation UK charges the packer a licence fee to use the brand. Nearly all of this is spent on marketing. The brand is, like ‘organic’ or ‘free range’, a
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certification of a quality attribute which is of importance to some consumers, but impossible for them to check for themselves. Fairtrade is just one brand and should not be confused with the many brands which are sold as Fair Trade (two words) which are marketed and certified in other ways.
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Consumers buy the brand in the belief that by doing so they are helping Third World farmers. In particular they know that they may be paying a higher price for Fairtrade goods, and they believe that most or all of the extra amount paid goes as a higher price to the farmers.
The consumers receive false information which ‘materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.’ (Great
Britain, 2008). Many examples are documented in the attached sources, but a few examples are given here.
The International Fairtrade Standards for coffee require that the extra payment, i.e. the minimum price plus the ‘Fairtrade premium’, is made to the exporter, FOB port of export, not to the farmer. If this extra money is in fact paid (and there is evidence that it often or usually is not) much of it goes on the extra costs incurred in marketing the coffee, including certification and audit fees payable to Fairtrade. Some firms lose money from their
Fairtrade membership. Any money left must be spent on ‘social projects’: it is a requirement that it is not made to the farmer at all. If this is not done the coffee etc may not legally be sold as Fairtrade. There is no evidence that farmers receive a higher price. They do, however incur higher production costs. The full explanation of why the following statements are false is given in the attached reports, most particularly Griffiths (2014a).
The Fairtrade Foundation (UK) makes claims which are contrary to those of the international Fairtrade Standards and are also contradicted by the evidence on what actually happens. A few of the most obvious are:

The marketing narrative of the Fairtrade Foundation (UK) concentrates on one simple message. They state that the key guarantee behind the
FAIRTRADE Mark is ‘A fair and stable price to farmers for their products’
(Fairtrade Foundation, 2005).
 ‘Fairtrade means farmers get a fair price for what they grow. The Fairtrade price is often much more than they would normally get, and it covers the cost of growing the crop, plus enough to live on. The Fairtrade price is paid to farmers by whoever buys their crops.’ (Fairtrade Foundation, 2012?)
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Indeed some Fair Trade (two words) brand owners have asked whether the Fairtrade brand is being passed off as being the only real Fair Trade brand, ‘any marketing of a product (including comparative advertising) which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor’ (Great Britain, 2008)
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
‘The FAIRTRADE Mark means farmers get a fair price for what they sell, plus a bit extra.’ (Fairtrade Foundation)

Martin Hill, then Director of Commercial Relations, Fairtrade Foundation UK, now Executive Commercial Officer at Fairtrade International (FLO), told a coffee conference, ‘one thing you can guarantee with Fairtrade is that the minimum price and the premium that you are paying is paid at farm gate’
(2009), as there is a vast amount of evidence to show that this is incorrect, not least the Fairtrade Standards themselves (Fairtrade International, 2011c, p. 16).
There are in addition false statements which are disproved by the evidence produced by a range of researchers. Again, only a few of those discussed in the attached papers can be mentioned here. o ‘The international Fairtrade system monitors and audits the product supply chains to make sure the producers are genuinely getting the money, and that the farmers, workers and their communities are benefiting from the investment of the premiums’ (Fairtrade Foundation, 2006). (For a review of the evidence that this does not happen see (Griffiths P. , 2014b) o There are frequent and false claims that Impact Studies show that Fairtrade has a positive impact on the poor in the Third World. Any economic intervention has positive and negative impacts, and it is easy to bias the result by selecting only the evidence that supports your position. Accordingly there are strict rules for Impact Studies, that positive and negative impacts should be counted, that the position before and after the intervention should be compared, and that there should be comparisons of those directly affected with control groups of those who were not. I have found no studies that meet these requirements, and it is argued that Impact Studies for
Fairtrade may be impossible. (Griffiths P. , 2012; Griffiths P. , 2014a)
‘Misleading omissions
6.—(1) A commercial practice is a misleading omission if, in its factual context, taking account of the matters in paragraph (2)—
(a) the commercial practice omits material information,
(b) the commercial practice hides material information,
(c) the commercial practice provides material information in a manner which is unclear, unintelligible, ambiguous or untimely, or
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(d) the commercial practice fails to identify its commercial intent, unless this is already apparent from the context, and as a result it causes or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.’ (Great Britain, 2008)
This is examined in great detail in the papers attached, particularly in Griffiths (2012) where it is concluded that the Unfair Trading criteria suggest that Fairtrade goods may not lawfully be sold without the clear label:
‘This product costs x pence more than the equivalent non-Fairtrade product. Of this, y pence (z %) goes into social projects, but we have no evidence that these produce benefits to the farmers. We have no reason to believe that any extra money is paid to farmers, though they certainly incur extra costs to get Fairtrade certification. Non-Fairtrade farmers are harmed. We spend much of the money trying to create a non-capitalist political and economic system, which is set out on www.politicalagenda.com
.’
Misleading comparisons are used in Fairtrade advertising which may be Unfair
Trading or Misleading Marketing.
2 For instance an important part of the Fairtrade message, published in the Frequently Asked Questions part of their website, is
‘Are Fairtrade products always more expensive than non-Fairtrade products?
‘Not necessarily. Over the last year, the Fairtrade Foundation has looked regularly at the prices of both products carrying the FAIRTRADE Mark and similar conventional products. Some Fairtrade products are actually cheaper than non-Fairtrade ones. For example, whilst Sainsbury’s Fairtrade
Colombian roast and ground coffee was selling at £1.99 in March 2006 (50p off, RRP £2.49), another Latin American coffee that was not Fairtrade certified was selling at £2.75.
2 ‘4. Comparative advertising shall, as far as the comparison is concerned, be permitted only when the following conditions are met—
(a) it is not misleading under regulation 3;
(b) it is not a misleading action under regulation 5 of the Consumer Protection from
Unfair Trading Regulations 2008(a) or a misleading omission under regulation 6 of those Regulations;
(c) it compares products meeting the same needs or intended for the same purpose;
(d) it objectively compares one or more material, relevant, verifiable and
representative features of those products, which may include price;’ (Great Britain,
2008b)
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‘Many Fairtrade products are priced similarly to other products on the shelf. For example, Tesco Finest Java Sumatra and Mocha Sidamo are both
£2.18, exactly the same as the Tesco Fairtrade Medium Roast coffee. And when Marks & Spencer changed all the tea and coffee on their shelves to
Fairtrade in 2006 they did so without increasing retail prices.’ (Fairtrade
Foundation, 2006)
Clearly these are invalid comparisons: only a comparison of the same brand of the same quality is valid. There is no way for a shopper in the supermarket to compare the price and quality of a non-Fairtrade coffee described only as Indian coffee, 100% Arabica ‘roasted on the darker side of medium for a rich, full-bodied flavour with hints of dark chocolate and citrus fruits’ with a Fairtrade coffee for which the only information given is that it is ‘rich roast, our richest blend. Deliciously dark, intense and bold and always direct from the growers’, and to work out how much extra they are paying, especially as they are different brands. Supermarkets are insistent, when it pays them, that one cannot compare the prices of own brands because of quality differences (Neville, 2013).
‘3(b) it concerns any failure by a trader to comply with a commitment contained in a code of conduct which the trader has undertaken to comply with,’ (Great Britain, 2008)
Examples of failure to comply with Fairtrade Standards are to be found in research quoted in the attached reports. For example research evidence from researchers in several countries shows that in many or most cases importers do not pay the exporters the increased prices which form the key part of the Fairtrade Standards (Griffiths P. , 2014a, p.
13). By definition, the Fairtrade brand certifies that the product conforms to the Fairtrade
Standard. It is, therefore, fraud for an importer to sell a product not meeting the Standard as Fairtrade.
‘4. The promotion of any unfair commercial practice by a code owner in a code of conduct is prohibited’. (Great Britain, 2008)
Legal opinion is required on whether the publication of false and misleading information by the code owners of the Fairtrade brand or their withholding of relevant information, so influencing the actions of the final sellers, constitutes Unfair Trading under this provision.
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It is sometimes possible to prosecute the people who provide the false or misleading information used for misleading advertising.
3 Legal opinion is required on which organizations other the final seller can be prosecuted.
I wrote to the directors responsible for corporate ethics of seven major food retailing chains in the UK, ASDA, Tesco, Sainsbury, Waitrose, The Cooperative, Morrisons and Marks and Spencer, enclosing ‘Ethical Objections to Fairtrade’ (Griffiths P. , 2012), and stating that it provided evidence of major ethical failings and widespread criminality. These chains state that they are proud of their traceability, and can normally trace sub-standard produce to the producing farm within hours. All of them sell their own-brand Fairtrade coffee (implying that they take full responsibility for it) and all but one sell other brands as well. I got no reply from ASDA, Waitrose, Tesco, and the Coop. Morrisons wrote to say that they had passed the paper to Fairtrade, but did not respond when I asked some months later what reply they had received. Marks and Spencer asked me to contact their Ethical Trading Manager
(Foods), who, after a reminder, replied some months later suggesting that I complain to
Fairtrade Labelling Organizations International. Sainsbury’s Chief Executive replied,
‘We are well aware of the challenges of ensuring that the benefit consumers seek through supporting the brand in their shopping decisions, are actually delivered. . . However, we believe that the best way to bring about change is from within and that through working to re-engineer supply chains in a truly sustainable way consumers and
3 ‘3.—(1) Advertising which is misleading is prohibited.
(2) Advertising is misleading which—
(a) in any way, including its presentation, deceives or is likely to deceive the traders to whom it is addressed or whom it reaches; and by reason of its deceptive nature, is likely to affect their economic behaviour; or
(b) for those reasons, injures or is likely to injure a competitor. (Great Britain, 2008b)’
‘Misleading advertising
6. A trader is guilty of an offence if he engages in advertising which is misleading under regulation 3.’ (Great Britain, 2008b)
‘Offence due to the default of another person
9.—(1) This regulation applies where a person “X”—
(a) commits an offence under regulation 6, or
(b) would have committed an offence under regulation 6 but for a defence under regulation 11 or 12, and the commission of the offence, or of what would have been an offence but for X being able to rely on a defence under regulations 11 or 12, is due to the act or default of some other person “Y”.
(2) Where this regulation applies Y shall be guilty of the offence subject to regulations 11 and
12 whether or not Y is a trader and whether or not Y’s act or default is advertising.
(3) Y may be charged with and convicted of the offence by virtue of paragraph (2) whether or not proceedings are taken against X.’ (Great Britain, 2008b)
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producers can indeed be brought closer together, in a way that satisfies these aims.’ [sic]
We may compare this with the instant, decisive and widely publicised reaction of
Marks and Spencer when they found that Facebook had placed a third party advertisement offering Marks and Spencer vouchers on a page called ‘cute and gay boys’ (Cellan-Jones,
2013).
I have also given talks at both the European and the British coffee conferences which were attended by traders and by directors of café chains.
Our schools are telling schoolchildren to buy one particular commercial brand. They are telling them to press their parents to buy it and to tell supermarkets to stock it. They are telling them this in religious education, geography, personal and social education and citizenship classes. But the law says that it is the criminal offence of Unfair Trading to include ‘in an advertisement a direct exhortation to children to buy advertised products or persuade their parents or other adults to buy advertised products for them’. Are the schools colluding in a criminal offence?
Details of this and of the extremely aggressive marketing tactics used are given in
Griffiths (2014b)
There is prima facie evidence for the prosecution of people selling Fairtrade goods, especially their own brands.
There is evidence of grossly unethical conduct by other people, conduct which appears to be unlawful. Legal advice is needed on who exactly should be prosecuted.
Cellan-Jones, R. (2013, June 28). M&S and BSkyB threaten Facebook boycott over
adverts. Retrieved June 28, 2013, from BBC News: Technology : www.bbc.co.uk/news/technology-23097411
Fairtrade Foundation. (2005). Are consumers getting a fair deal from Fairtrade
products? Retrieved May 22, 2011, from Fairtrade.org.uk: http://www.fairtrade.org.uk/includes/documents/cm_docs/2008/R/1_Retail_pricing.pdf
Fairtrade Foundation. (n.d.). Fairtrade Makes a Difference - Your Fairtrade activity
guide. Retrieved March 22, 2013, from Fairtrade.org.net: http://www.fairtrade.org.uk/includes/documents/cm_docs/2011/P/Pupil%20Leaflet%20an d%20Activity%20Sheet.pdf
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Fairtrade Foundation. (2006). Retail pricing of Fairtrade Products. Retrieved 3 7,
2013, from http://www.fairtrade.org.uk/what_is_fairtrade/faqs.aspx
Fairtrade Foundation. (2012?). Teaching and Learning Notes. Retrieved 3 22, 2013, from http://www.fairtrade.org.uk/includes/documents/cm_docs/2011/T/Teaching%20and%20Le arning%20Worksheets.pdf
Fairtrade International. (2011c). Explanatory Document for the Fairtrade Trade
Standard. Retrieved 1 15, 2013, from http://www.fairtrade.net/fileadmin/user_upload/content/2011-12-
29_Explan_Doc_GTS_EN.pdf
Great Britain. (2008b). The Business Protection from Misleading Marketing
Regulations 2008. London: The Stationery Office.
Great Britain. (2008). The Consumer Protection from Unfair Trading Regulations.
London: The Stationery Office.
Griffiths, P. (2012, Feb 22). Ethical Objections to Fairtrade. Journal of Business Ethics ,
105:357–373.
Griffiths, P. (2012). Ethical Objections to Fairtrade. Journal of Business Ethics , 105 (3)
357-373.
Griffiths, P. (2014b). Fairtrade, Unlawful Behaviour, Ethics: Controlling the Discourse.
Griffiths, P. (2013). Fairtrade: comment on Tedeschi and Carlson. Journal of
International Development , DOI: 10.1002/jid.2965.
Griffiths, P. (2003). The Economist's Tale: a consultant encounters hunger and the
World Bank. London and New York: Zed Books.
Griffiths, P. (2014a). Unlawful Conduct, Ethics and Fairtrade: Ethical Obligations of the Brand Owner.
Neville, S. (2013, March 19 ). Sainsbury's warns Tesco over own-brand price promise.
The Guardian .
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