COMMENT: Ethical consumerism - France the leader
Fair trade labeling schemes are currently regulated by FLO (the Fairtrade Labeling Organisation), an international body that imposes the same criteria for each individual scheme such as Fairtrade in the UK or Max Havelaar in France.
In France, 60% of consumers claim to be aware of the concept of fair trade, which guarantees developing world producers a fair price for their produce as well as making a commitment to support sustainable development initiatives. However, most consumers lack specific knowledge and understanding of how this works, and are confused by the apparent diversity of "ethical" labeling schemes.
Le Monde has reported this week that the French government now intends to establish a single set of fair trade standards that all companies claiming to follow such schemes would have to adhere to. This is currently scheduled to happen in 2006. However, the plan is by no means limited to France. French and German ministers hope a Europe-wide standard can be established by the EU over the next few years.
In addition to a desire to encourage the fair trade sector, this initiative is also intended to provide some clarity and order in the proliferation of similar schemes amongst manufacturers and retailers, some of which can be misleading. Many private "ethical" commerce schemes are limited to paying producers more than the generally low global commodity prices, but without any of the commitment to sustainable development (such as investing in local community projects such as schools or hospitals) that characterise the labeling schemes endorsed by FLO.
The rise of ethical consumerism provides food, drinks and personal care players with an opportunity to review their relationships with consumers and to strengthen them. Essentially, the overarching issue is one of trust. Consumers' ethical concerns are inexorably linked to concerns over the safety of products, whether they are food, drinks or personal care items, and to issues relating to quality such as provenance, traceability and freshness. Over the next five years it will be essential for CPG manufacturers and retailers to reassure consumers that these are matters that are equally important to them.
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