Fair Trade in Scotland: review

Executive Summary

'In November, the United Nations climate change summit in Glasgow will attract more than 30,000 people from around the world…….

'And it will give Scotland a chance to show that we are leading by example - not just by reducing our greenhouse gas emissions but by doing so in a way that helps to build a fairer, healthier and happier society'.

First Minister, Nicola Sturgeon, 2020 New Year message

I. Introduction

This independent Review of Fair Trade sales growth and promotion in Scotland, commissioned by the Scottish Government's International Development (SGID) Team, is published at a time when there has never been a better opportunity for Fair Trade to re-state its relevancy to the climate change emergency through using fair and ethical trade to sustain the livelihoods and environments of the poorest communities across the globe.

Figure 1.1: Graphic representation of Fair Trade, International Fair Trade Charter 2018.

Infographic text:

Fair Trade

Gender Equity
Food Security
Sustainable Livelihoods
Ecological Balance
Thriving Communities
"People First" Trade Policies
Decent Work
Inclusive Economic Growth

The International Fair Trade Charter (2018) describes Fair Trade as a movement which 'works to transform trade in order to achieve justice, equity and sustainability for people and planet'.

The 'fairer society' which the First Minister emphasises in her New Year message, is inextricably linked to our actions (or inaction) to tackle the climate crisis at an international level, our approach to fair and responsible trading arrangements and the way in which SG and business works with its international neighbours to tackle the injustice and human rights abuses in supply chains. Scotland has positioned itself as a Fair Trade Nation and now needs to take seriously the challenge that the ten principles of Fair Trade, aligned to the Global Goals and National Performance Framework present to all levels of Scottish society - from parliamentarians, civil servants and business leaders, to NGOs, public agencies, social enterprise and the individual consumer. Starting the journey to embed fair and ethical trade across all functions of government and business constitutes a transformative response to creating the fairer society that, global citizens in Scotland should work towards.

II. Review Purpose and Structure

The Review's purpose has been to enable SG to further progress Scotland's potential to achieve inclusive growth through the delivery of increased sales and awareness of Fair Trade, as key actions in achieving the United Nations International Sustainable Development Goals (SDGs) adopted in the International Development Strategy published in 2016 and which are planned up to 2030. The report has been structured to illustrate the current environment and context for growing Fair Trade sales and awareness, summarising existing promotional and policy activity, identifying barriers and opportunities for progress and concluding by a recommending a series of actions across key themes.

i. Context and current activity

Chapter 1 sets the scene for the review, providing detail on the mixed methodology adopted to assessing both qualitative and quantitative evidence gathered throughout the review period, utilising both primary and secondary data sources. It reviews the progress of Fair Trade in Scotland as an alternative trading model since the late 1960s to Scotland's reassessment as a Fair Trade Nation in 2017 and assesses the activity undertaken by the Scottish Fair Trade Forum (SFTF) in Scotland and the Fairtrade Foundation in the UK. It defines the concept of Fair Trade using the International Fair Trade Charter's definition and articulates the 10 principles of Fair Trade, noting that 2019 was the 25th year anniversary the introduction of the Fairtrade Mark certification scheme.

Scotland's long history of campaigning for Fair Trade and the Scottish Government's ambition for Scotland being a good global citizen are described in the chapter. Achievements include the work of the SGID in support of the SFTF which has proved its effectiveness through Scotland being re-assessed as a FT Nation in 2017.

Chapter 2 broadens the review of context through exploring the links between Fair Trade, SDGs, Scotland's Inclusive Economy and its National Performance Framework. The chapter maps where synergies exist with the ten principles of Fair Trade and identifies areas for both collaborative work and eliminating policy incoherence across SG.

Opportunities and challenges for Fair Trade alignment to SDGs, and in particular Climate Change, are described, highlighting the dangers of viewing the SDGs and Fair Trade as being a purely consumer labelling initiative, rather than more fundamental issues of wider economic injustice. Leading by example, through promoting existing Fair Trade adoption across public, third and private sectors is encouraged to improve visibility, whilst messaging should be updated to increase Fair Trade's relevancy.

SGID and Global Citizenship and Beyond Aid policies are explored and the existing partnerships between Scotland's International Development Alliance, Scotland Malawi Partnership, Development Education Centres and SFTF recognised, together with examples of where these might be improved. SGID work with partners in the NHS in Scotland is also highlighted as an example of embedding the Global Goals, active global citizenship and fair and ethical trading practice within a major public agency in Scotland. The Review notes that awareness of Fair Trade in the wider context of Global Citizenship is generally poor across the public and government sectors. Upskilling and awareness raising amongst the workforce and leaders of these key institutions is highlighted as a priority.

European development policy in relation to Fair Trade, 'Beyond Aid' and public procurement is described and a critique provided of progress to date, identifying that scalable growth in other European countries has been aligned to changes in public procurement practice and upskilling of relevant trade and procurement agencies.

The chapter concludes with a critique of existing SG policy relating to Fair Trade, through the lens of Policy Coherence for Sustainable Development (PCSD) and highlighting Fair Trade's relevance to many of the SG's National Performance Framework Indicators. The chapter recommends a series of priority actions relating to International Climate Change, Learning for Sustainability, International Trade, Business, Fair Work, Social Economy and Sustainable Public Procurement policy areas. It also calls for the Fair Trade movement itself to be honest about where incoherence has existed and to be accountable for measures to address these areas.

ii. Identifying the market and current performance

Chapter 3 provides a review of the Fair Trade Market in UK and Scotland, including a summary of consumer behaviour, trends and the market context. It also identifies the global FT market and international market trends for FT and ethical products, which overall show sustained growth, although with some deceleration in some European countries.

For the first time, the review was able to analyse sales statistics (based on household sales) over
2 years (2017 and 2019) for Scotland, showing a declines (9%) in consumer sales in retail outlets, largely in confectionery 'impulse' purchases, due to the withdrawal of several major confectionary brands from the Fairtrade Certification scheme during 2017-18. The sales figures represent a benchmark from which future trends in sales can be monitored on an annual basis.

Chart 1.1: FT Mark certified Scottish sales trends by product category, 2017 and 2019.
Kantar Worldpanel

Additional baseline information is included on retailers and suppliers of Fair Trade goods to the Scottish market, collated through an online survey, demonstrating the range of business and organisations active in supporting sales, from social enterprises to co-operative and commercial businesses.

Chapter 4 goes on to explore in further detail the opportunities and barriers to growth within Fair Trade sales and awareness in Scotland, based on extensive qualitative interviews and two online surveys - of retailers and suppliers and of Scottish Fair Trade campaigners. Key issues of both challenge and opportunity were found to be:

• Consumer 'Fair Trade' literacy
• Supply and distribution of FT products to market
• Access to public procurement contracts
• Brexit and implications for Fair Trade in relation to international trade and procurement policies and practice
• Enterprise support for Scottish Fair Trade Organisations and the role of social enterprise and business support agencies
• Building volunteer capacity through new models, across Fair Trade Networks in Scotland.

Persistent barriers for growth identified by suppliers and retailers included competing with the price and margins of low cost brands and retailers together with supply chain concerns. Opportunities to emphasise Fair Trade's alignment to the social economy in Scotland are discussed, with new models of Fair Trade related to producer relationships and mutual community/economic benefits.

iii. Study visit to Sweden and international case studies

Chapter 5 reports on a study visit to Sweden carried out as part of the review, benchmarking Swedish practice against the Scottish experience and identifying opportunities for growth and promotion of Fair Trade. The visit included interviews, meetings and field visits involving Fair Trade Sweden, Swedish Association of FT Retailers, FT Cafes and support agencies including Coompanion - the Swedish National Social Enterprise Support agency.

The visit identified several initiatives which are being implemented to boost FT sales growth. including the "Ambassador Scheme", Penpals Association, campaigns, and links to the social economy movement. Main campaigns included a "Living Wage" campaign and South-South trading opportunities.

Three additional short case studies are included in this chapter from other countries, highlighting good practice in accelerating Fair Trade sales growth (South Korea), legislating for Fair Trade (France) and Fair Trade design innovation (Holland, mobile phones).

Chapter 6 concludes by providing a number of recommendations following analysis of the evidence gathered during the Review, summarised here in sections III and IV.

III. Key Messages from the Review

Fair Trade in Scotland can rightly be proud of its achievements since the first handmade Christmas cards were retailed by Oxfam Scotland in the late 1960's. Sales of Fairtrade Mark Certified products have experienced a remarkable growth trajectory, achieving nearly £68 million in grocery sales in 2019. Scottish Fair Trade Organisations, as micro-businesses, continue to promote direct and dignified trading relationships between North and South, demonstrating the benefit of transparent and equitable supply chains in supporting producers towards sustainable income, stronger communities and greater wellbeing. The SG has continued to support Fair Trade in Scotland through its International Development Strategy focused on Global Citizenship and has committed to fund the Scottish Fair Trade Forum, the membership advocacy body for Fair Trade in Scotland, for a further three years.

However, there is no room for complacency. Scottish Fair Trade grocery sales declined dramatically since several major brands withdrew from the Fairtrade Mark certification licensing (and took the license fee income for Fairtrade with them). Despite being reassessed as a Fair Trade Nation in 2017, there was a tangible sense of frustration expressed by Scottish Fair Trade campaigners, Fair Trade Organisations and partner organisations through the review's primary research. It was felt that at Scottish Parliament and Government levels there was little developmental commitment to changing the way trade works, how businesses operate or in applying fair and ethical trading to the way in which public services procure goods.

Looking forward, opportunities were identified for strengthening the success of Fair Trade to date, drawing upon developments in pursuing Fair Trade and the SG Goals internationally and work already carried out to develop the Active Global Citizenship model by SG International development. Responsibility for realising growth in Fair Trade sales and ethical and fair trading/ business practices lies with all levels of Scottish society, from Parliament, Government and public agencies to business leaders, educators, young people and longstanding activists.

Four priority themes for consideration and action in order to scale up Fair Trade growth were identified by the Review:

• Fair Trading messaging and relevancy: re-booting its radical approach to reducing inequality through trade;
• Influencing behaviour change: education and upskilling focused on Government, public agencies and business groups;
• Visibility and access to product range: improving supply chain access to Fair Trade products for consumers in Scotland and
• Coherent Policy for sustainable development: ensuring that across SG, there is greater coherence in the approach to trade, human rights, procurement, exporting and importing.

These are represented in the following graphic which highlights the key contexts in which Fair Trade in Scotland should operate.

Infographic:

Infographic text:

Fair Trade Messaging and Relevance
Social enterprise and new business models

Visibility and Product Range
Wellbeing Economy: viewing with global lens

Coherent Policy: Achieving Impact
Global Goals and Climate Change

Behaviours: Education and Upskilling
National Performance Framework Indicators

IV. Conclusion

The Review found that scalable growth in Fair Trade will only be achieved through adoption of Fair Trade policies and purchasing practices by large public and corporate procurers. Upskilling and education work needs to prioritise engagement with procurement and corporate policy leads in public agencies (including the procurement agencies themselves), the corporate business sector and national Food Service providers. Informing decision makers about the relevance of fair and ethical trade to sustainable procurement and the delivery of the UN Global Goals has the potential to accelerate changing purchasing behaviour, increasing Fair Trade sales and making fair and ethical product choices easier for the consumer in Scotland at leisure or work.

Most of all Fair Trade needs to be understood by all stakeholders as more than a consumer oriented labelling initiative, but rather a key tool for ensuring that a wellbeing economy - aligned to meaningful indicators across the National Performance Framework (and not restricted to international development) - is achievable within the next ten years as pursuit of the Global Goals gains traction.