Global sales of fairtrade coffee hold up in economic downturn

By agency reporter
November 3, 2008
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Global sales of Fairtrade coffee are holding up well despite an economic slowdown, coffee dealers and farmers' unions have said.

The Fairtrade system helps farmers and workers from poor countries to develop their communities through fairer terms of trade.

The movement developed in the 1990s at a time of falling commodity prices.

Barbara Crowther, head of communications at London-based Fairtrade Foundation, said the global financial crisis would not stop consumers from buying premium-cost Fairtrade coffee.

"We believe that if people need to economise they are not going to stop buying Fairtrade coffee," she told Reuters in a telephone interview.

"From all the consumer research that we can see, the public remains committed to their values when it comes to Fairtrade," she said.

Crowther said consumers with less disposable income due to the credit crunch, could switch to a cheaper brand or buy their Fairtrade coffee from a different store, rather than abandon the Fairtrade label.

Fairtrade coffee farmers' groups in Ethiopia and Uganda said they were concerned about the impact of the financial crisis, although they had not yet felt the impact deeply.

"As of now we have not yet experienced here a significant impact in terms of reduction in the price of fairly traded coffee," said Joseph Nkandu, executive director of the National Union of Coffee Agribusinesses and Farm Enterprises in Uganda.

"It has not been so long since the financial crisis began. Probably we will start noticing if it drags on."

Dessalegn Jena, deputy general manager of the Oromia Coffee Farmers' Co-operative Union in Ethiopia, said the Fairtrade coffee market was growing to meet consumer demand, but he voiced concern about the outlook due to the economic meltdown.
"Because of the global financial crisis, it is uncertain that demand will increase because Fairtrade is part and parcel of global markets," Jena said.

Spokesmen for Nestle, the world's biggest food group, and ASDA, Britain's second-biggest supermarket group, said the global credit crisis had not yet affected sales of Fairtrade coffee.

Fairtrade coffee sales at ASDA were steady, and non-Fairtrade coffees and instant coffees were growing modestly, an ASDA spokesman said.

"Consumers tend to buy into Fairtrade because they believe in the ethics behind the products," he said.

"We are waiting to see whether the credit crunch begins to impact Fairtrade coffee sales in the future.

Seattle-based coffee shop chain Starbucks Corp said this week it was doubling its global buying of Fairtrade certified coffee to 40 million pounds ($64.13 million) in 2009 making it the largest purchaser of Fairtrade certified coffee.

"The increased purchases will come from (Fairtrade) co-operatives in Latin America, Asia Pacific and Africa," a Starbucks spokeswoman said.

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