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An Ethical Dilemma for Consumers & Retailers?. FAIRTRADE. Fair Price Fair labour conditions Direct trade Democratic and transparent organizations Community development Environmental sustainability . Example of a FAIRTRADE Labeling organization (FLO): Transfair. Ethical Dilemmas.
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FAIRTRADE • Fair Price • Fair labour conditions • Direct trade • Democratic and transparent organizations • Community development • Environmental sustainability Example of a FAIRTRADE Labeling organization (FLO): Transfair
Ethical Dilemmas • Influence of FAIRTRADE label on Customer purchase intentions • If a wholesale firm could source, say, only 40% of its coffee from Transfair, should it bother to separate its sales into two brands? • Trading in FAIRTRADE products the end of wholesaler or retailer responsibility?
Influence on Customer purchase intentions • Yes. Although this preference is linked to the price comparison of the products available • Ready to pay 10-15% premium on FAIRTRADE products • Adverse impact if the price difference is too high
Branding Issue • Separate Brands • Individual Vs Community • Ethical Coffee is Premium Brand, higher price • Caters for society where “everybody feels guilty” • Consumer forced to make ethical decision in supermarket aisle • Combined Brand • Short Vs Long and Individual Vs Community • Producer is making ethical decision for consumer (relief!) • Retailers need to advertise moral high-ground
Is Transfair a cop-out for retailers? • One hand wholesaler or retailer’s purpose is to provide its customers with a good products at the lowest price possible • On the other hand, a wholesaler or retailer might need to do more in term of social responsibility and check that the supply chain is ‘fair trade’ audited for all its products in stock. • Especially relevant in Quasi-monopoly for food retailing like in Australia by Coles and Woolworths
Ethical Dilemma • Right Vs Right Paradigm • Individual Vs Community • Short Term Vs Long Term • Truth Vs Loyalty • Resolution Principles • I Means to an End – Australian customers Vs millions of growers • II Rule Based – Kantian principles • II Golden Rule
Resolution • Coles and Woolworths could follow the example of Whole Foods Market • Whole Trade Guarantee program, their in-house fair trade program • Target of more than 50% FAIRTRADE products in 10 years and in the long-term convert to only FAIRTRADE products imported from third world countries