Fair trade booming despite German belt-tightening

Last year, German consumers spent 266 million euros ($376 million) on products carrying the international initiative's green and blue logo, which exists in the same form throughout Europe. This amounts to nearly three times the fair trade sales of just five years ago.

"The financial crisis has not affected Fairtrade sales at all," said Hans-Christoph Bill, the managing director of Germany's Fair Trade Forum, the network of fair trade organizations in the country.

The organization registered a sales increase of 38 percent in 2008, in spite of the financial crisis. It's expecting double-digit growth for 2009.

The biggest increase has been in the sale fruit juices - up by 80 percent - while coffee, tea and honey continue to do well.

The Fair Trade initiative started in Germany in 1992.

Despite the success of certain brands, Germany still lags behind other European countries in its embrace of fair trade - an idea of social trade whereby the profits are divided fairly between producers, go-betweens and sellers.

Bill cited the UK as an example of productive government involvement, with London quadrupling subsidies for ethical products in recent years.

Too much competition

Another reason for Germany's comparatively lackluster performance was the high extent of competition within the country's food industry. Germany's wide range of supermarket and discount outlets made it difficult for the branding to spread throughout the market, Bill said.

With the economic crisis pushing up basic costs in developing countries, suppliers now rely even more on a fair price for their products and on consumers continuing to buy them.

"It's a different story for the producers," said Bill. "Even before the crisis every second starving person in the world was a small-holder from a developing country. Our trading partners are suffering very greatly from the crisis, because the prices for basic goods, for fuel, for fertilizer have gone up. It's getting harder for farmers to get loans to prepare for the harvest and subsidies for poorer countries have been decreasing in recent years."

Though there is a demand in industrialized countries for ethical products, fair trade advocates say more could be done. Governments and companies could also make fair-trade purchases, Fairtrade Forum's Bill said, adding that the supply is great enough to meet an increase in demand.

Author: Tanya Wood
Editor: Nancy Isenson