Fairtrade clothing is new battleground for retailers
Monday, 26 February 2007
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Fairtrade clothing has become the new eco-battleground for Britain's top retailers as demand for ethically certified cotton has doubled in six months.
The brand, which pays farmers more, is now struggling to keep pace with requests from high-street shops such as Marks & Spencer, Next, J Sainsbury and Debenhams.
The number of cotton producers that have been awarded the Fairtrade mark in the last year has increased by a third to 100 but demand is still likely to outstrip supply. M&S alone will need a third of the world's current supply to meet its pledge to be the UK's biggest seller.
Speaking ahead of Fairtrade fortnight which starts today, Tamara James, business development officer at the Fairtrade Foundation, said: "The amount of interest from the UK market means that we will need to certify more farmers."
The amount of Fairtrade cotton sold in the UK rocketed last year, far outstripping more established products such as bananas, coffee and chocolate. Cotton sales soared by almost 4,000 per cent in volume and by just over 3,000 per cent in value. The first lines reached UK shops in November 2005, supported by seven licensees (who pay the foundation in return for using its logo). That number has since risen to 30.
Sainsbury's first Fairtrade clothing ranges will arrive in its stores today. The supermarket controls most of the Fairtrade market - about 31.7 per cent, despite having a smaller share of overall grocery sales. Tesco controls 20.9 per cent and Asda 10.1 per cent. All the UK's retailers are seeking to improve their green credentials with a public that is increasingly concerned about the environmental and social impact of their choices. Tesco and M&S are spending hundreds of millions of pounds on their eco-projects.
Judith Batchelor, director of Sainsbury brand, said: "The ethical space is very crowded. When it comes to Fairtrade, the only limiting factor is our ability to supply it rather than demand. We are pushing at an open door." Fairtrade sales at the supermarket, the country's third biggest, are tipped to rise by 145 per cent this year to £130m, largely on the back of its decision to switch all of its bananas to Fairtrade.
Sainsbury's, the first major retailer to launch Fairtrade food in 1994, expects the brand to account for £200m by 2008 - out of total annual sales of around £17bn. It has appointed a full-time Fairtrade "ambassador" based in Kenya to look for more opportunities.
In Mali, where Sainsbury's sources much of its Fairtrade cotton, farmers receive 41 cents per kilo, 5 cents of which goes towards community investment such as schools. That compares with a price of 24 cents on the world market, which fell by 24 per cent from 2005 to 2006 facing competition from synthetic fibres and Western subsidies. Globally about 100 million households depend on cotton farming and two thirds of the crop comes from developing countries. It accounts for 40 per cent of all exports from west Africa.
Waitrose has also announced plans to double Fairtrade sales over the next year and has also switched all of its bananas. Steven Esom, Waitrose's managing director, said ethical spending was becoming "a mainstream consideration on customers' shopping lists".
Total UK sales of Fairtrade products are running at £300m a year, a rise of almost 50 per cent in the past year. Mintel, the research organisation, predicts the total Fairtrade market will be worth at least £547m by 2011.
Sceptics argue that most of the Fairtrade profit goes to retailers not farmers. They also criticise the movement for encouraging farmers to produce more of some commodities than others rather than diversifying, and depressing crop prices.
Rise and rise of eco-business
* Coffee: sales up 36 per cent by volume and 39 per cent by retail value from 2005 to 2006.
* Tea: increased 58 per cent by volume and 50 per cent by retail value.
* Bananas: increased 55 per cent by volume and 38 per cent by retail value over same period.
* Chocolate: increased 22 per cent by volume and 25 per cent by retail value .
* Wine: up 77 per cent by volume and 68 per cent by retail value.
* Flowers: up 161 per cent by volume and 136 per cent by retail value.
* Cotton: up 3,692 per cent by volume and 3,102 per cent by retail value.
