All eyes on ‘industry first’ ethical banana buying coalitions

Improving the lot of growers and workers in distant and often complex supply chains is something campaigners have been urging action on for decades.

Farmers involved in sourcing commodities such as coffee, cocoa and bananas for the major supermarkets are often at the frontline of the climate crisis and have to contend with poor working conditions, coupled with low pay and non-existent worker rights.

Meanwhile the grower businesses they work for will, in many cases, be at the mercy of global commodity prices, coupled with inconsistent and often unfair contractual relationships with buyers – who themselves often get caught out by the lack of oversight they have within these supply chains and the horror stories that sometimes emanate from them.

It’s for these reasons businesses have been expelled by NGOs such as the Ethical Trading Initiative in the past, and why groups like Banana Link campaign for retail price hikes and improved worker conditions.

But any collaborative efforts to improve standards between major supermarkets and groups such as the Fairtrade Foundation have – until now – been hampered by concerns around the contravention of antitrust laws.

After the Competition & Markets Authority published what Fairtrade described as “game-changing” draft guidance last November, however, could we be about to see improvements?

That’s certainly what the NGO thinks, with the FT reporting today that Fairtrade was in talks with “several” British supermarkets over plans to combine forces to buy ethically sourced bananas, coffee and cocoa from farmers in developing countries via industry-first “buying coalitions”.

Sainsbury’s pays a banana premium

A pilot scheme dubbed the Shared Impact Initiative is apparently already underway, which could see more ethically sourced product on shelves within months.

This would build on more informal collaboration projects, with nine major supermarkets committing to a living wage for banana workers in their international supply chains in March last year. Sainsbury’s got ahead of the others in meeting its commitment three years early, and now pays for the fruit plus a premium that is invested into worker wages.

However, there are hopes this new coalition could make even bigger improvements to transparency across supply chains and give farmers more security through longer contracts, the FT reported.

“Farmers are increasingly at the sharp end of the climate crisis, while struggling to make ends meet on chronically low incomes, almost negligible negotiating power, frequent changes to sourcing agreements for small proportions of their product, and the relentless pressure to prioritise quick, short-term gains over long-term sustainability,” Fairtrade associate director for responsible business Anna Mann told The Grocer.

“Shared Impact will mean longer-term sourcing commitments, closer relationships with businesses as a collective, and greater opportunities to sell more of their produce on Fairtrade terms,” she added.

“This is expected, in turn, to lead to better incomes, more Fairtrade Premium funds and Minimum Price protection, a greater share of power in supply chains, and more resources to invest in a greener, resilient, more sustainable future.”

The Co-op is reported to already be heavily involved with the project via a cocoa pilot, with coffee and bananas to follow.

The FT reported Sainsbury’s and Tesco were also in talks about the scheme, though it reported one supermarket still feared falling foul of the CMA if it worked with competitors, so it had been engaging only “tentatively” with the scheme to date.

A game-changing move in banana supply?

Ultimately, the project can only be a good thing if it improves conditions on faraway farms, and the move has broadly been welcomed by the industry with Alistair Smith, founder of Banana Link, telling The Grocer it could be a “major step forward”.

However, the devil is in the detail and further clarification is needed to see what this would look like in reality, he argued.

Smith told The Grocer how useful it would be hinged on the initiative being linked to “collectively bargained living wages and fair incomes for all the producers and workers involved through long-term commitments” as well as trade union involvement.

All eyes will now be on the take-up around the scheme and its delivery, but, delivered in the right way, this move could well be the “game-changer” Fairtrade hopes it will be.

Clarity is needed to be able to fully understand the impact of this latest step forward for the sector. Regardless, it is a step forward and a united front can only be a good thing.

As Mann added: “Improving sustainability in food supply chains demands credible and collaborative solutions – no one business and no one producer can change the dial on a resilient food system on their own.”

Without legal concerns hanging over their heads, retailers can finally bring about real change – something long overdue.