Cadbury Goes fairtrade

[Sankari]

Capitalism isn't about making as much money as possible

Well, it is. It's certainly not about trying lose all your money as fast as you possibly can. Capitalism is about making money, first and foremost. Everything else is simply a discussion of the methods.

it's about letting the market decide prices rather than artificially fixing them. And then using the market to make as much money as possible.

If a company agrees to pay its supplier a higher price, how is that "artificially fixing"?

Government-imposed minimum wage levels are a classic example of "artificially fixing". But since fair trade prices are established by voluntary mutual agreement (and not by the forced imposition of prices by a regulatory body) there is no "artificiality". It's just a classic case of letting the market players decide. Pure capitalism!

 

[Sankari]

I don't see it as unrelated, the "fairtrade" scheme seems to have been introduced to mollify, at least some of, those who previously campaigned for free trade. It only helps those who sign up for the scheme and creates an ultimately unsustainable and artificial demand for a specific product.

Of course it only helps those who sign up to the scheme. Where's the problem in that? Would you rather it was forced upon people who didn't want it?

I see no evidence that it creates an ultimately unsustainable and artificial demand for a specific product. Can you point me in the direction of any long-term studies that substantiate these claims?

 

[dannyjo22]

Fair trade always seems to cost twice as much, and usually not taste as nice as other chocolate...
Hope they don't change Dairy Milk.

Agreed, I love Cadburys chocolate. They had better not **** with the taste.

 

[jimmyt1988]

I haven't found anything labelled as "fairtrade" that also still tastes good.

err, what? Fairtrade just means the product is sold for an agreed price so the worked get better money and regular..

It doesnt affect the taste?

For example, most coffee beans are fair trade now..

The farmers get paid better in foreign countries. not, the farmers get paid more so they pee on the coco / coffee / tea.

correct me if im wrong?!?!

 

[growse]

Well, it is. It's certainly not about trying lose all your money as fast as you possibly can. Capitalism is about making money, first and foremost. Everything else is simply a discussion of the methods.

Well, it's a semantic argument. I could argue that any economic system is ultimately about making as much money as fast as possible, which you can then use to improve quality of life. Capitalism just achieves this by allowing private ownership, reducing governments role to a minumum, and letting the free market determine prices of things, but there's other methods of achieving the goal of making as much money as possible, and you wouldn't necessarily call them capitalism. What I'm trying to say in a ham fisted way is that making as much money as possible (read: be as economically successful as possible) isn't a property specific to capitalism, but to all economic systems.

If a company agrees to pay its supplier a higher price, how is that "artificially fixing"?

Government-imposed minimum wage levels are a classic example of "artificially fixing". But since fair trade prices are established by voluntary mutual agreement (and not by the forced imposition of prices by a regulatory body) there is no "artificiality". It's just a classic case of letting the market players decide. Pure capitalism!

Now this is a more interesting point. The buyer and the seller are conspiring to price-fix within the market, and passing that onto the consumer. Ultimately, the consumer would normally have a choice between lower prices and higher 'fairtrade' prices for the same goods, and the rational free-market economist would be expected to choose the lower. However, people's irrational (but arguably well-founded) moral wishes override this and they spend more money on the same product, presumably thinking that this is some act of charity.

So, what we have is a moral-cartel. My question is: if the producers need our charity, why not achieve this through the more normal methods rather than trying to fix the markets? If they don't need our charity, what's the point?

 

[Hatter The Mad]

Clicky

Awesome news for gullible oafs like me who missed cadbury chocolate

Fixed

 

[bam0]

Of course it only helps those who sign up to the scheme. Where's the problem in that? Would you rather it was forced upon people who didn't want it?

The effect is too localised and does nothing to help the producing countries as a whole, I'd like to see import tariffs removed and producing countries allowed to freely compete in our markets.

I see no evidence that it creates an ultimately unsustainable and artificial demand for a specific product. Can you point me in the direction of any long-term studies that substantiate these claims?

The coffee production glut in the early half of this decade; http://www.adamsmith.org/publications/economy/grounds-for-complaint?-20041122123/

 

[Sankari]

Well, it's a semantic argument. I could argue that any economic system is ultimately about making as much money as fast as possible, which you can then use to improve quality of life.

No you couldn't, because this definition does not adequately describe the purpose of models such as communism and socialism.

Capitalism just achieves this by allowing private ownership, reducing governments role to a minumum, and letting the free market determine prices of things, but there's other methods of achieving the goal of making as much money as possible, and you wouldn't necessarily call them capitalism. What I'm trying to say in a ham fisted way is that making as much money as possible (read: be as economically successful as possible) isn't a property specific to capitalism, but to all economic systems.

I would say that it is common to most economic systems (the majority, in fact).

Now this is a more interesting point. The buyer and the seller are conspiring to price-fix within the market, and passing that onto the consumer.

How is this "price-fixing"? If I agree a lower price than the average market price for my goods, is that also "price-fixing"? I just don't see price-fixing here. The buyer and producer are free to set their own prices, and if they charge more, the market will decide their fate because consumers will make up their own minds about whether or not they are prepared to pay the higher price. Meanwhile, non-fair trade buyers and producers are entirely free to set a lower, more competitive price - which is arguably more attractive to the consumer anyway. So what's the problem?

Ultimately, the consumer would normally have a choice between lower prices and higher 'fairtrade' prices for the same goods, and the rational free-market economist would be expected to choose the lower. However, people's irrational (but arguably well-founded) moral wishes override this and they spend more money on the same product, presumably thinking that this is some act of charity.

Again: what's the problem? People are freely agreeing their own prices, and the consumers are freely choosing what to buy.

So, what we have is a moral-cartel.

How is this a "moral-cartel"? And even if it was, how is this relevant?

My question is: if the producers need our charity, why not achieve this through the more normal methods rather than trying to fix the markets?

(a) what are "the normal methods"?
(b) this is not about trying to fix the markets; it's about improving the relationship between buyer and producer, for their mutual benefit.

If they don't need our charity, what's the point?

It's not charity; it's capitalism. When you give someone something for nothing with a view to improving their circumstances, that's charity. When you buy something from them at an agreed price, that's an economic transaction.

 

[Sankari]

The effect is too localised and does nothing to help the producing countries as a whole

The primary purpose is to help the producer, not the entire nation. Fair trade is not a fix-all for 3rd world countries. If it's localised, that's because it's supposed to be localised.

I'd like to see import tariffs removed and producing countries allowed to freely compete in our markets.

That won't happen, because the first world nations are notoriously protectionist; just look at the USA.

The coffee production glut in the early half of this decade; http://www.adamsmith.org/publications/economy/grounds-for-complaint?-20041122123/

I'd prefer an unbiased source, please. The Adam Smith Institute is a right-wing thinktank. I don't trust them to present an objective case.

 

[Le_Petit_Lapin]

err, what? Fairtrade just means the product is sold for an agreed price so the worked get better money and regular..

It doesnt affect the taste?

For example, most coffee beans are fair trade now..

The farmers get paid better in foreign countries. not, the farmers get paid more so they pee on the coco / coffee / tea.

correct me if im wrong?!?!

I don't know how it affects the taste, I assume its because these foreign chaps working the farms realise hat they're going to get paid a set minimum price no matter what the quality of the produce is, so they grow the hardiest and quickest growing crop they can without a thought given to the taste. of course this also pushes out the competition who aren't fairtrade certified who are actually growing a decent crop, but not getting paid anywhere near the same for it, so they stop bothering.

Most coffee beans aren't fairtrade, thank god, if it has a fairtrade logo like this:

...then its fairtrade, and personally I'd recommend you don't buy it, because its liable to taste like a dog has urinated in your morning coffee.

 

[Inquisitor]

Great...its all gonna taste like ass now...

You clearly haven't tried this before:

I don't know why people like Cadbury's so much. It tastes far too sweet and artificial.

 

[TheOtherOption]

Good for those farmers, I guess they can't all have Cadburys contract - will have to try some once I see it on shelves.

 

[merlin]

I've tried various fairtrade coffee and all have tasted nasty.

Now I actively avoid anything fairtrade for fear of wasting my money on crap food and drink sporting the price tag of something quality.

 

[Steve2000]

All the fairtrade garbage that I've ever had including coffee, chocolate etc has all been absolutely repugnant. Tastes like regurgitated, processed, mechanically recovered, bleached, flavoured clay, mixed with cardboard and faeces.

Why is it that they try to do some good but never deliver it properly? Bit like water/electric powered cars, they are supposed to be helpful for the environment etc, but why on earth are they all about as good looking as a bad case of diarrhoea down the leg? I don't believe in all this fairtrade garbage anyway, you help one set of farmers but erode other farmers' profits in the process. One word for it all: starts with B and ends in ollox.

 

[growse]

Not really got the time to cover each point in detail, but you do raise valid points.

I would say that it is common to most economic systems (the majority, in fact).

Yes. My opinion is that it's necessary for the economic system to be successful in the real world, but there's probably a counter-example somewhere.

How is this "price-fixing"? If I agree a lower price than the average market price for my goods, is that also "price-fixing"? I just don't see price-fixing here. The buyer and producer are free to set their own prices, and if they charge more, the market will decide their fate because consumers will make up their own minds about whether or not they are prepared to pay the higher price. Meanwhile, non-fair trade buyers and producers are entirely free to set a lower, more competitive price - which is arguably more attractive to the consumer anyway. So what's the problem?

I'm not saying it's a problem, I'm saying it's subverting the market. There is a market value on (say) cocoa. Assuming all cocoa is the same, and the buyer knows nothing about where it comes from or how it's made, the market will determine a price that is supportable. Now, the subversion comes because of the middle man who sits between the consumer (us) and the producer (farmer). If the middle man negotiates a higher price with the producer and then passes it on, the consumer has lost out, from a price point of view. They're getting the same product, but paying above the market rate.

There isn't necessarily anything wrong with this because, as you point out, people still have the option of paying the lower price. But I think a lot of people don't like the muddling of what is effectively charitable support with free-market economics. A lot of places are now removing the choice (see Sainsburys + bananas). I'm torn on this, because I'll defend the right of a corporate to sell whatever it wants for whatever price it wants, but as a consumer I don't like having choice removed from me because one of them is perceived to be 'less moral'. I'm capable of deciding that for myself.

(a) what are "the normal methods"?
(b) this is not about trying to fix the markets; it's about improving the relationship between buyer and producer, for their mutual benefit.

You can give to charity without attaching that giving to a particular purchase. And to (b) I don't object to the overall goal, I just think that it might be a slightly short-sighted way of doing it that ultimately only benefits the corporation from a PR point of view.

It's not charity; it's capitalism. When you give someone something for nothing with a view to improving their circumstances, that's charity. When you buy something from them at an agreed price, that's an economic transaction.

I can charitably agree to buy your jaffa cake from you for £100 if I think you need the money. But I'd rather buy your jaffa cake for 3p and then give you £99.97, than pretend that your jaffa cake is worth £100.

 

[N9ne]

All the fairtrade garbage that I've ever had including coffee, chocolate etc has all been absolutely repugnant. Tastes like regurgitated, processed, mechanically recovered, bleached, flavoured clay, mixed with cardboard and faeces.

Why is it that they try to do some good but never deliver it properly? Bit like water/electric powered cars, they are supposed to be helpful for the environment etc, but why on earth are they all about as good looking as a bad case of diarrhoea down the leg? I don't believe in all this fairtrade garbage anyway, you help one set of farmers but erode other farmers' profits in the process. One word for it all: starts with B and ends in ollox.

Funniest post I've read today! Totally agree though.

 

[Dinomania]

Does this mean other producers will suffer from a loss of sales?

This is why I'm a bit suspicious of Fair Trade.

So farming group A get higher prices for their wares, which allows them to benefit from a slightly higher quality of life. Lovely.

All the other farmers, group B are supplying all the non fair-trade firms (B firms) still. OK so far.

However the Ethical Public fall for Fair Trade, and start to shun the normal firms in favour of those paying farmers a better living. This is still nice.

UNTIL the B firms start losing market share. Like Cadbury's, maybe they switch over to Fair Trade. Or, maybe they just reduce supply of the underselling item.

Either way, farming group B are getting less business, so less money. And it's VERY likely group B is bigger than group A.

So bully for the Fair Trade farmers, but in reality it's not doing any good overall

EDIT: Also, because group A have been singled-out and are so handsomely paid, could it be that they pay less attention on quality in order to get ahead of their neighbours? Could that be why taste/quality declines? They've got a cushty thing going - and I think it highly unlikely that a farmer would be ditched by Fair Trade for being of poor standard - that'd be 'unethical', no?

 

[Amp34]

I don't know why people like Cadbury's so much. It tastes far too sweet and artificial.

Because it tastes sweet and not bitter like the vast majority of other chocolate?

As long as they don't put the price up I don't care tbh, although I do worry that the product will go down in quality.

From experience most fairtrade products are of sub standard quality because they trade of the "fairtrade" ness and not taste, so they make as much money as they can by scimping on other parts of the production, while still charging more than comparable products.

Take for example the fairtrade orange and apple juices sold in our uni shop, they are from concentrate but cost more than non concentrate equivilent. The question is why are they shipping in apples anyway, there are plenty of apples in the UK so if we are to pay over the odds for apple juice at least let the money go to british farmers instead, and you'll save on transport costs...

Unfortunately fairtrade IMO is just a way for companies to make more money, both by projecting an image of caring and by charging more for the same product. Yes there are some people in Africa for example who make a bit more money but most of the extra profit will just go straight into the hands of the businesses. What I really want to know is if the fairtrade foundation also looks into the ecological welfare of the farmers, ie. that they are not sacrificing wildlife and habitat to grow their fairtrade products.

 

[G-MAN2004]

Should pay them as little as possible We need to keep the money within the UK, not give it away!

 

[Amp34]

This is why I'm a bit suspicious of Fair Trade.

So farming group A get higher prices for their wares, which allows them to benefit from a slightly higher quality of life. Lovely.

All the other farmers, group B are supplying all the non fair-trade firms (B firms) still. OK so far.

However the Ethical Public fall for Fair Trade, and start to shun the normal firms in favour of those paying farmers a better living. This is still nice.

UNTIL the B firms start losing market share. Like Cadbury's, maybe they switch over to Fair Trade. Or, maybe they just reduce supply of the underselling item.

Either way, farming group B are getting less business, so less money. And it's VERY likely group B is bigger than group A.

So bully for the Fair Trade farmers, but in reality it's not doing any good overall

EDIT: Also, because group A have been singled-out and are so handsomely paid, could it be that they pay less attention on quality in order to get ahead of their neighbours? Could that be why taste/quality declines? They've got a cushty thing going - and I think it highly unlikely that a farmer would be ditched by Fair Trade for being of poor standard - that'd be 'unethical', no?

Sounds about right to me, although there may be a quantity of group B farmers who then become part of the fairtrade group?

I think taste/quality differences are not necessarily to do with the raw product (cocoa beans) but the companies making the final product, who are using the fairtrade logo to sell their products and not the quality/taste, so they make more profit by reducing the quality of their product slightly to make more money. (like I said in my previous post)..

What I would also be interested to know is how much extra the price of fairtrade raw materials would actually be per final product. I can't see it being more than a penny if that for say a bar of chocolate, maybe 5p for a jar of coffee? Which just shows how much more profit the companies selling their faritrade products, for say 50p more, are making.