Q. (7 October 2005) Why has a company as unethical as Nestlé been given a Fairtrade mark for its Partners Blend coffee?

A. The award has been controversial and for many people is clarifying what the mark does and does not signify.

The announcement of the Fairtrade mark for Nestlé's Partners Blend comes in the same month trade unionists in the Philippines mourn the death of Disdado Fortuna, the leader of a protest at the Nestlé Sagara factory, who has been assassinated, as trade unionists from Colombia gather in Switzerland to present evidence of Nestlé's links to paramilitaries who have been terrorising activists and a Halloween campaign is launched against Nestlé in the US over its alleged "involvement in the trafficking, torture, and forced labor of children who cultivate and harvest cocoa beans which the companies import from Africa", over which legal action has been brought. (Follow these links for interviews with campaigners from the Philippines and from Colombia).

Nestlé's new coffee has gone straight onto the boycott list because of its baby food marketing malpractice. People who want their shopping to help people in developing countries are best advised to try products from genuine Fair Trade companies and not be duped by Nestlé's attempted diversion. According to Nestlé's press release, the coffee in its Partners' Blend is sourced from 200 farmers in El Salvador and an undisclosed number working in a coopertative in Ethiopia. Even if 3,000 farmers were involved, this is less than 0.1% of the farmers supplying Nestlé. So virtually 100% of Nestlé's coffee suppliers remain outside the Fairtrade system (click here for details of the calculation). According to Twin Trading's statement, the volume of coffee involved is just 0.02% of that Nestle purchases. According to a researcher with the Colombian Food Workers' Union 150,000 coffee-farming families have lost their livelihoods due to Nestlé's policies and he labelled the Fairtrade product 'a big joke' - (click here to hear an interview).

Baby Milk Action consulted supporters using an on-line questionnaire.to investigate the impact of the mark on the boycott and the Fair Trade campaign. We have analysed the first 100 responses which came in the first afternoon.

The results so far suggest the campaign has little to fear amongst existing boycott supporters as Nestlé's awful image is not overcome by a Fairtrade fig leaf on one product when 8,500 are not Fairtrade and Nestlé's human rights abuses and environmental destruction continue. However, amongst the general public the situation may be more complex.

The response to our questionnaire suggest there is confusion about the Fairtrade mark amongst campaigners, and 90% of boycotters said they are also supporting Fairtrade. If Nestlé was given a Fairtade mark for Partners Blend, 50% of respondents said they would change their view of Fairtrade. You can read some comments in the analysis. Many said they feel they will now have to investigate other companies with the Fairtrade mark to see if they are ethical or not. While many see the mark as an indication of 'ethical' business, it is much narrower than this. Some said the Fairtrade Foundation should apply the criteria rigidly, without considering a company's other suppliers or ethical issues.

The Fairtrade Foundation says on its website:

"The Fairtrade mark is only given to individual products and not to companies. The mark indicates that Nestlé's Partners' Blend has complied with the internationally agreed standards for Fairtrade certification. It does not refer to any other product marketed by the company. This product has undergone exactly the same certification process as all other Fairtrade products whether marketed by multinationals or smaller companies. The Fairtrade mark guarantees consumers that those producers have received a fair and stable price for their product. The mark is not an endorsement of any company or its activities."

Baby Milk Action has encouraged people to buy Fairtrade products as an alternative to Nestlé products and will continue to do so, while listing Nestlé's Fairtrade product on the boycott list. We have encouraged the Fairtrade Foundation for many years to refuse a Fairtrade mark to Nestlé while there are others serious ethical concerns because it will bring discredit on the mark and undermine the campaign to protect infant health.

When we heard of the possibility of Nestlé receiving a mark for Partners Blend we lobbied against this. The Fairtrade Foundation feel they have to award the mark to any product that complies with their criteria. We have asked them to make it much clearer in their materials what the mark does and does not signify, as in the statement above. The Fairtrade Foundation have asked us to inform them if and when Nestlé uses the mark inappropriately, which we will do.

Please contact us when you see or hear Nestlé using this one Fairtrade product in its attempts to divert criticism of its malpractice.

It seems that Nestlé's association with the Fairtrade mark will force people to take a much more critical view of the mark. For example, many of the student unions that endorse the boycott and support Fairtrade products as an 'ethical alternative' will have to revise their motions to acknowledge that Fairtrade products may come from companies which are not ethical and there should be an alternative or additional test.

The Fairtrade Foundation says about the boycott on its website:

"Of course we acknowledge that many Fairtrade supporters have other concerns about this company's practices. We also recognize that bringing about change in the behaviour of multinationals requires a variety of strategies and approaches....

"We are not asking people to change their position on the boycott of Nestlé products, which aims to change the way the company promotes breastmilk substitutes around the world. We naturally respect the right of consumers to decide which products they purchase.

"While some campaign groups use boycotts as a way of achieving their aims, the Fairtrade Foundation's specific role is to engage with companies that are prepared to adopt Fairtrade standards and certification for particular products. They are different approaches, but with the same aim of winning positive change in the way business operations impact on people in developing countries.

"Many people have supported both campaigns until now, and they will still be able to do so, as they can choose from 18 other Fairtrade certified instant coffee products." Click here for the full text.

Nestlé has indicated in the past that it is ideologically opposed to Fair Trade as anything other than a niche market.

Nestlé's 2005 coffee report (click here) states:

"Nestlé recognises that Fair Trade is a useful way to raise consciousness about the coffee issue and for individual consumers to express their solidarity with a group of coffee farmers in the developing world. However, if on a broad basis, coffee farmers were paid Fair Trade prices exceeding the market price the result would be to encourage those farmers to increase coffee production, further distorting the imbalance between supply and demand and, therefore, depressing prices for green coffee. Worldwide, the Fair Trade movement accounts for less than 25 000 tonnes of green coffee. Nestlé's direct purchasing accounts for 110 000 tonnes of green coffee per year. This system enables the farmer to retain a greater portion of the price paid by Nestlé, therefore improving his income." (see page 6).

Note that Nestlé's claim about buying direct does not indicate it is paying a fair price for the coffee. The farmer would receive a greater portion of the price paid by Nestlé even if the company paid less than commercial market rates.

It remains to be seen whether Nestlé will bring growth to the Fair Trade market as the Fairtrade Foundation hopes, or will damage confidence in the mark and take sales from genuine Fair Trade companies.

National Childbirth Trust

Belinda Phipps, Chief Executive of the National Childbirth Trust, said in a public statement:

"Nestlé's clever and extremely well funded marketing strategy has to be  admired. If this single new brand is awarded fair trade status the whole company is likely to be viewed as ethical  by consumers. The NCT urges everyone to remember that Nestlé's promotional activities  encourage the use of products that are detrimental to the health of babies and children all over the world and to avoid all Nestlé brands."

UNISON

Sharon Greene, UNISON Women's Officer, said in a public statement:

"This is a cynical attempt by Nestlé to try to divert attention away from their scandalous baby-milk marketing activities in the world's poorest countries and their appalling employment practices."