Concern as Sainsbury’s replaces Fairtrade with its own Fairly-traded certification

There are fears the new scheme will take power away from smallholder producers and co-ops in the retailer’s supply chain

Supermarket giant Sainsbury’s has announced its own-brand tea will no longer be Fairtrade-certified, in a decision that will affect 229,000 farmers, mostly members of smallholder producer organisations, including co-ops.

Instead, the retailer is launching its own sourcing project, Fairly Traded, in a pilot scheme to replace its Fairtrade-certified own-brand Red Label and Gold Label teas.

The Fairtrade Foundation said it was not partnering with Sainsbury’s on the pilot because it had “fundamental concerns that it falls below the core principles of Fairtrade”.

One crucial worry, it added, is that farming groups in Africa say the move will take away power from them –  and the retailer may not keep some of the farming groups in its supply chain under the new scheme. Sainsbury’s has not stated which suppliers it will source from under the new scheme.

Michael Gidney, chief executive of the Fairtrade Foundation, said: “Fairtrade and Sainsbury’s have worked together for many years and we are rightfully proud of what we have achieved for some of the world’s most marginalised farmers.

“While we welcome and expect companies to work towards improving social, economic and environmental outcomes within their supply chains, we don’t believe the execution of this current model will, on balance, deliver positive changes for tea farmers.

“Therefore, at this stage we are unable to partner with the Sainsbury’s Foundation as it does not yet meet our core principles, particularly in the area of producer empowerment.”

Tea producers from across the East and Central Africa and Southern Africa networks of Fairtrade Africa also criticised the decision in an open letter.

“We told Sainsbury’s loud and clear: your model will bring about disempowerment,” the wrote. “We are extremely concerned about the power and control that Sainsbury’s seeks to exert over us.

“We work for, own our product and own our premium. We see the proposed approach as an attempt to replace the autonomous role which Fairtrade brings and replace it with a model which no longer balances the power between producers and buyers.”

The farmers’ main objection is that Sainsbury’s Fairly Traded Social Premium will be managed by the Sainsbury’s Foundation and farmers and workers will only be able to access these funds if they are successful in applying for grant funding for investment following project proposals.

Fairtrade Foundation’s approach is different because it enables farmers and producers to decide for themselves how the Fairtrade Premium is spent.

Related: Co-ops respond to Cadbury’s Fairtrade logo swap

Mr Gidney suggested Sainsbury’s should monitor and evaluate the impact of the tea pilot project before expanding it to other products.

Michael Gidney wants the retailer to monitor the pilot before extending it

“We’re certain Sainsbury’s will welcome further public scrutiny and we look forward to seeing their published plans for their tea pilot including transparent standards, delivery plans and measurable outcomes at the earliest opportunity,” he said. “While we cannot partner with them on an untested pilot as it stands we would welcome opportunities to work with Sainsbury’s in the future if together, we can embed Fairtrade’s principles within their model.”

The new Fairly-Traded range will be available from June. Sainsbury’s will continue to offer its premium ranges of Fairtrade-certified teas as well as Fairtrade-certified tea from their Taste the Difference range. Own-label Fairtrade bananas, coffee, chocolate and flowers will also remain on Sainsbury’s shelves.

Sainsbury’s group chief executive, Mike Coupe, said: “I’m immensely proud to be launching the Fairly Traded pilot today, alongside the new sustainability standards and advisory board. Ethical and sustainable sourcing are at the heart of our business and as the world changes we cannot stand still. That’s why this innovative pilot will build on our existing work and relationships and we’re aiming to deliver significant benefits for our farmers, our business and our customers.

“The business case is clear. Our farmers and growers can expect financial security through long-term relationships and a greater level of support to help them plan for their futures. At the same time we safeguard the future quality and availability of the great British cuppa for our customers.”

Alongside the Fairly Traded pilot, Sainsbury’s is running a new advisory board of independent specialists from charities, academics and NGOs. The retailer has also developed a Sainsbury’s Sustainability Standards programme across key crops and ingredients, which, it says, will help farmers understand their strengths and vulnerabilities and develop strategic action plans.

“The 21st Century presents complex problems for our suppliers,” said Mr Coupe. “We most certainly don’t pretend to have all the answers – far from it –and that’s why this project is about testing and developing new approaches, collaborating with expert partners and listening to our farmers and producers – finding out what works, and what can be taken to scale and adopted to secure a sustainable supply chain that benefits both our suppliers and our customers.”

Austin Changazi, general manager of the Sukambizi Association Trust, Malawi, which produces tea for Sainsbury’s, said, “We wholeheartedly welcome the idea of working with Sainsbury’s on the Fairly Traded initiative.”

But Sophi Tranchell, chief executive of Divine Chocolate, believes the new project will take power away from producers, favouring retailers.

She said: “Fairtrade was set up to ensure a greater balance of power between producers and companies. Over more than two decades it has established itself as the most effective way of ensuring a sustainable income for farmers, and giving a genuine choice to consumers who care.  This move by Sainsbury’s represents a tip in the balance back to the powerful retailers.”

Divine sells Fairtrade chocolate and is co-owned by a producer cocoa co-op in Ghana.