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Cablegate: "Fair Trade" Experiences Rapid Growth in France,

This record is a partial extract of the original cable. The full text of the original cable is not available.

121710Z Jul 05

UNCLAS SECTION 01 OF 02 PARIS 004871

SIPDIS

SENSITIVE

STATE FOR EB/TPP AND EUR/WE

STATE PASS USTR

E.O. 12958: N/A
TAGS: ETRD ECON BEXP FR
SUBJECT: "FAIR TRADE" EXPERIENCES RAPID GROWTH IN FRANCE,
GARNERS GOF SUPPORT


1. (SBU) Summary. Despite a slow start, the idea of "fair
trade" and "fair trade" products is rapidly growing in
popularity and sales in France. Although not as advanced as
in the rest of Europe, awareness has increased greatly due
to efforts by NGOs, the private sector, and not least, the
French government. Although formerly confined to coffee,
tea, and bananas, the range of "fair trade" products is
expanding. Several large "fair trade" brands are sold in
major supermarkets alongside regular merchandise. The
French government is active in its support of "fair trade",
with a government-chaired commission working to establish a
French "fair trade" label, or appellation. GOF action to
organize "fair trade" domestically may pave the way for a
likely EU standard and possible WTO exemption status. End
summary.

FAIR TRADE IN FRANCE
---------------------

2. (SBU) Despite a recent surge in popularity, "fair trade"
(items which seek to give primary producers - like coffee
growers and banana growers - a "fair" price for their
products usually by cutting out middlemen and extensive
marketing) only accounts for 0.1% of European trade with
underdeveloped nations. This market is even less developed
in France than in the rest of Europe. French consumers
devote an average of 0.64 euros per year on fair trade
products, compared with average yearly spending of 2.26
euros (UK) and 14 euros (Switzerland) per consumer.
Regarding products with fair trade labels as a subset of all
fair trade products, French consumers spend approximately
0.2 centimes per consumer each year, lagging far behind the
average of 6.75 euros spent annually by the average Swiss
consumer. To promote awareness of fair trade, Max Havelaar
France began a campaign in May 2002 asking 500 cities or
metropolitan areas to officially support fair trade.

3. (SBU) Sales of fair trade products are now rapidly
progressing in France. Despite the small proportion of fair
trade sales (1% of total retail trade), the movement is
accelerating. According to a February 2004 survey conducted
by IPSOS for the Max Havelaar enterprise, 56% of French
consumers had heard of the fair trade movement compared to
9% four years ago. Of the French consumers familiar with
fair trade, one-third have bought fair trade goods--
signifying that approximately 20% of the population has
participated in fair trade. Accordingly, Max Havelaar
France reports a rapid consummation increase in volume of
fair trade products, jumping from 3900 tons to 8400 tons.
Food products (especially coffee, tea, cocoa and bananas)
constitute approximately 60% of fair trade purchases, with
coffee sales comprising one-half of this revenue. Fair
trade has expanded to include crafts and industrial goods
(such as pottery, clothing/cotton and even soccer balls).
Between 2003 and 2004 French spending on fair trade products
nearly doubled. This rapid growth in sales seems to
indicate a steeply growing demand for fair trade products
making France a leader in fair trade commerce growth.


PRIVATE SECTOR ACTORS
----------------------

4. (SBU) The increased sales of fair trade products in
France may be attributed to their recent availability in
conventional retail outlets as opposed to specialized fair
trade boutiques and distributors (such as Artisans du Monde,
Solidar'Monde or Andines) that operate on a smaller scale.
Notably, super stores such as Leclerc, Carrefour, Monoprix,
Cora and Auchan now stock fair trade products alongside
their normal stock. These super stores continue to expand
their fair trade product selection and anticipate steep sale
increases in this area. Leclerc reported 9.2 million euros
in sales of fair trade products in 2004 with a prediction of
15 million in sales for 2005.

5. (SBU) Other players in fair trade industry are the NGOs
and distributors who make fair trade their primary activity.
These include associations and "labeling" enterprises that
not only distribute fair trade items, but also promote them
through awareness campaigns. Among the principal "commerce
equitable" names are Max Havelaar, Alter Eco and
BioEquitable labels. Some super stores have even
implemented their own fair trade certification mark. In
many respects, fair trade has come to be a niche market for
such enterprises.

6. (SBU) In the sphere of civil society, many associations
promote fair trade. The primary French fair trade NGOs are
Max Havelaar France and Plate Forme Francaise du Commerce
Equitable. Max Havelaar represents the original fair trade
certification program, begun in the Netherlands, but has
since been exported to neighboring countries. The Plate
Forme Francaise du Commerce Equitable in particular works
closely with government officials to implement support
programs for fair trade. At the instigation of the Plate
Forme, the first two weeks of May have been designated the
"Quinzaine du Commerce Equitable". This annual event began
in 2001 and continues to mobilize all actors within the fair
trade system to educate the public on this type of commerce.

GOVERNMENT PARTICIPATION
------------------------

7. (SBU) The French government seems eager to embrace and
regulate the fair trade industry. After two years of fair
trade discussions by the Association Francaise de
Normalisation (AFNOR), the negotiations failed to produce
any consensus on key concerns among the major players in
fair trade. The principal challenges facing fair trade
include durability of this trend, consumer access to fair
trade products and legitimacy of fair trade labels.
8. (SBU) In May 2005 National Assembly Deputy Antoine Herth
submitted a report to then-Prime Minister Raffarin
containing 40 propositions to support the development of
fair trade in France. The report outlines a series of
criteria and controls to create a unified system of fair
trade regulating the current multiplicity of fair trade
labels. After reception of the Herth report, former Prime
Minister Raffarin charged Minister of the Public Sector and
Small Business Christian Jacob with the re-creation of a
national commission on fair trade. Under the auspices of
AFNOR, this commission (led by the interministerial
delegation for social innovation and a social economy) has
undertaken the task of codifying the criteria of fair trade
exchanges to serve as a general reference. Their
conclusions are expected by the end of July 2005.
9. (SBU) The main objective of this commission is the
creation of a French national label designating authentic
fair trade goods. Such a consensus would assign the role of
"fair trade referee" to the GOF; all other fair trade labels
would be submitted to standard French criteria in order to
obtain the national certification mark. Thus the GOF would
create a national code of conduct and validation system for
fair trade comparable to French AOC labels. Minister Jacob
hopes to have such a system for fair trade put in place
during 2006.

COMMENT
--------
10. (SBU) Instead of waiting years for international
agreement, the GOF has decided to produce a national
standard for fair trade. The creation of a French norm on
the subject of fair trade is viewed as a first step towards
a European norm. Once such a norm is established, which
could be a number of years, observers see the EU seeking a
possible WTO status, allowing fair trade items to be
provided "special and different treatment."

STAPLETON

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