“Fairtrade coalition” of UK supermarkets potentially a game-changer

Britain’s biggest supermarket chains want to form a unique coalition to source fairtrade bananas, coffee and cocoa, to which the British competition authority would not object.

Positive effects

Several supermarket chains from the United Kingdom, including Tesco and Sainsbury’s, are in talks with the Fairtrade Foundation as they want to join forces to buy fairtrade bananas, coffee and cocoa from farmers in developing countries. It would be the first buying coalition of its kind, the Financial Times reports. The initiative would increase the availability of Fairtrade products to consumers.

Crucial to the project is approval by the Competition and Markets Authority (CMA), but the UK’s competition watchdog has recently indicated in an informal advice that it does not expect to take enforcement action as a result of the scheme. According to the CMA, the initiative is unlikely to increase prices for consumers. Joint buying would have neutral or even positive effects on competition by giving shoppers a wider choice of fair trade products.

Expansion to other markets?

A pilot project is now under way: the first bananas, coffee and cocoa bought under the new scheme, known as the Shared Impact Initiative, could be on shelves within months. The two biggest chains, Tesco and Sainsbury, are discussing it. Co-op is only participating in a trial of cocoa for now, but coffee and bananas may well follow. One unnamed retailer remains cautious for fear of a reaction from the CMA.

According to Fairtrade, the buying coalition would give supermarkets more power to resolve major sustainability issues – such as child labour, living wages and deforestation – more cost-effectively. Long-term contracts allow farmers in countries such as Colombia, Côte d’Ivoire, Ghana and Kenya to invest in more sustainable practices. If the project proves successful in the UK, the NGO hopes to expand it to other markets in Europe, including Belgium and the Netherlands, and eventually to the United States.