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Fair Trade: Overview, Impact, Challenges
Annex 5: Main Features of Fair Trade Labelling
Fair trade principles and values are now being applied to products which are not necessarily
produced by small producers. Fair trade labelling criteria differentiate between tea, orange
juice and bananas that are produced by small producers and plantations. Where they are
produced by plantations an additional set of requirements are specified by FLO which relate
to labour conditions and the way that the use of the fair trade premium is determined. As a
result the distinction between fair trade and ethical trade becomes that much more blurred.
Fair trade principles can be applied to non-commodity products. However, it is not clear that
it is possible to generate a set of labelling criteria for such products. Because the market for
craft products is so differentiated, there are no benchmark prices that can be used as the basis
for setting minimum guaranteed prices or price premiums. If such products were to be
labelled then not only would there need to be regular monitoring of the producer groups to
ensure that they comply with FLO International's criteria, but there would have to regular
revisions of the calculations as to what constitutes a fair price, so adding to the per unit costs
of labelling. One proposal under discussion is that there should be one pan European fair
trade label for food products and a non product-specific label for shops.
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