Reforms Call After Fairtrade Pioneer Enters Administration

Tuesday January 24 2023

Trade justice charity Transform Trade paid tribute to the world-changing impact of its founding organisation Traidcraft plc, after last week’s announcement that the pioneering Fairtrade company was going into administration.   

“We’ve been completely separate from Traidcraft since 2018, but we were really sad to hear the news”, said Transform Trade CEO Charlotte Timson. “The company forged a path for ethical, cross-border trade. Back in 1979 there was no Fairtrade label, no ethical coffee shops – now you can walk into any supermarket and buy a host of fairly traded goods. Hundreds of thousands of lives and livelihoods have been changed for the better because of the trail they blazed.” 

“In many ways, the odds were stacked against Traidcraft: trading ethically within a system that is fundamentally unjust is always going to be difficult, especially during a cost-of-living crisis,” she added. “Right now, retailers and brands can undercut ethical business through unfair purchasing practices. They can dump risk and additional costs onto producers, and trade in environmentally polluting ways. This has to change.”

Traidcraft pioneered the first fair trade chocolate, coffee, tea, fruit juice, wine, rice, honey, charcoal, rubber, and palm oil. It co-founded the Fairtrade Foundation, and helped establish the standards that underpin today’s Fairtrade mark.

It previously hit financial difficulties in 2018, which led to a major restructuring and the loss of the majority of its staff at its Gateshead headquarters.

Last week, its board released an official statement announcing the administration ‘with tremendous sadness’.

The statement said: “The business has been in a weak financial position for some years and the Covid-19 pandemic presented a significant new set of challenges. Just as we were emerging from the pandemic, like many other retailers, we faced the combined effects of the war in Ukraine, rising energy prices, and increased transport costs.

“Sadly, despite the heroic efforts of our team at Gateshead, low consumer confidence during the critical autumn trading period led to a sales result significantly short of what was required to sustain the operation. December sales were also negatively impacted by the uncertainty created by Royal Mail strikes.

“After much deliberation and following advice from external advisors, we have come to the conclusion that the only honourable course of action is to appoint administrators. Our hope is that by doing this in a timely manner, we can minimise the impact on our suppliers and creditors.

“It is heartbreaking to bring the Traidcraft plc story to an end in this manner but we can at least take some consolation from the knowledge that we have been a major force for good in the ethical retail sector for over forty years.”

Timson encouraged supporters saddened by the news to support next month’s annual Transform Trade Big Brew. ‘The fight for trade justice is needed now more than ever, and one way you can support it is through the upcoming Big Brew fundraiser in February, where hundreds of campaigners put on events around the country. Let’s make it the biggest Big Brew ever. To sign up or find out more, go to our webpage where you can order packs and download posters and other resources.’

Transform Trade, formerly Traidcraft Exchange, separated from Traidcraft PLC in 2018. It works in partnership with networks of workers, farmers and social entrepreneurs in South Asia and East Africa to fight for trade that values people over profit. Its campaign and advocacy work aims to level the playing field by raising the ethical standards of entire sectors – especially focusing on the areas of fashion, tea and farming.   

Transform Trade plans to expand its work supporting small groups of growers and artisans trading within their own countries, like those Traidcraft was originally set up to help, in order to fill the gap that they leave behind. The charity is also in discussions about what it can do to support the producers most affected by Traidcraft’s closure.

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