Fair Trade Coffee Essay
Global Marketing Management
International Summer University 2010- WU, Wien
Table of Contents
Introduction 3 Problem Statement 3 The Fair Trade vision 3 Background: The Fair Trade Foundation 4 Background: Fair Trade Labeling Organization International 4 Fair Trade Mark 4 Fair Trade Pricing 5 The Fair Trade Premium 5 Question 1. Why should Starbucks, Kraft, and Nestle create ‘ethical supply chains’? 6 Question 2: Do you agree with the finding that few consumers consider the impact of their purchase decisions on anyone or anything but themselves and their family? 7 Question 3: What recommendations would you make to help cure the ills of the …show more content…
‘Fair Trade’ is the label attached to products that meet the very strict and specific criteria set by the Fair Trade Labelling Organization (FLO). These criteria aim to help communities of small-scale farmers in the developing world with social, economic, and environmental development (FTM 2010). For example, this means ensuring that producers and traders of Fairtrade products are given a fair wage / price for their goods and a premium to be invested in community development and that minimum environmental standards are adhered to in the production of goods (Fair Trade Mark 2010).
Fair Trade Pricing
The Fairtrade minimum price is the minimum price that a buyer of Fairtrade products has to pay to a Producer Organization for their product. It is not a fixed price, but should be seen as the lowest possible starting point for price negotiations between producer and purchaser. It is set at a level, which ensures that Producer Organizations receive a price, which covers the cost of sustainable production for their product. This means it also acts as a safety net for farmers at times when world markets fall below a sustainable level. However, when the market price is higher than the Fairtrade minimum, the buyer must pay the market price. Producers and