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Last Updated: Thursday, 9 March 2006, 22:15 GMT
How fair is Fairtrade?
By Andy Webb
BBC Money Programme

More and more of us are prepared to pay extra to buy Fairtrade products, but is it really money well spent?

The Terry family
The Terry family try to steer clear of non-Fairtrade produce

In the last year, the Fairtrade market grew by 40% to a value of 200m, while the range of products is now over 1500 items.

After years as a niche product, Fairtrade seems to have finally broken through into the mainstream.

Yet as the movement grows, there is concern about the premium pricing of Fairtrade products in some supermarkets, and there is dismay in some circles that the controversial food giant Nestle has been granted Fairtrade status.

Big fans

The Terry family from Hampton in West London see themselves as a Fairtrade family.

Every week Christopher, his wife Sarah and son Joe buy Fairtrade products like coffee, tea and bananas.

They believe that the extra money they pay at the supermarket can make a huge difference to producers around the world, so they are big fans of the system.

The parents admit that their son was the driving force behind their support.

"We're responding to Joe's idea about Fairtrade. He wants us to think more carefully about where we buy our food from," they say.

Secretive supermarkets

Ian Bretman of the Fairtrade Foundation says the increasing number of families like the Terrys is testament to the movement's continuing success.

Fairtrade logo
If you think this is just beards and sandals and idealistic amateurs, then you should get out more
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"In the last three-four years, what we've seen is a really rapid growth," he says.

"It's very clear to us that as people become aware of the difference that Fairtrade makes to people in the developing world, they see that this is an opportunity for them to make a difference in their everyday lives, they really grasp that opportunity."

But not everyone is convinced.

Although the reverend John McCabe admits to being a Fairtrade fan, he thinks the price of products is too high, and does not think that all the extra he pays at the till goes to the farmers.

Mr McCabe has analysed supermarket prices and the amount of money that goes back to the producers under the Fairtrade system, and he cannot quite make the sums add up.

He believes the supermarkets are not being sufficiently open about their pricing of Fairtrade products.

"What I'd like to see is the whole premium going back to producer, and that being the only difference between non Fairtrade and Fairtrade."

Risky venture

The supermarkets insist they are playing their part to support fair trade, but one big name has gone further than the others.

Libby showing some Fairtrade products
The selection of Fairtrade products has become massive

In 2002, the Co-op converted all its own-brand coffee and chocolate to Fairtrade.

Until this week, they were the only supermarket to have done so.

The Co-op's Brad Hill says it was a risk.

"There was a cost to pay. Now there was no way we could ask consumers to pay that in its entirety so what we did, we absorbed some of that cost.

"We put some of that cost onto retail, but we reduced our profitability."

The decision paid off and they now sell 3m worth of chocolate a year.

Going mainstream

But pricing is not the only concern for Fairtrade consumers.

In late 2005, Nestle, one of the world's most controversial companies, released its own Fairtrade coffee: Partners' Blend.

The company is already subject to an international boycott for selling powdered baby milk in less developed countries.

Now, after years of saying Fairtrade was bad for the industry, Nestle admits that it was market forces that have changed its mind.

"We researched the market and we found that there are consumers out there who are very interested in development issues that are probably not currently buying a Fairtrade product, and they would be attracted into this market by the strength of the Nescafe brand, says Hilary Parsons, head of Partner's Blend Project at Nestle UK.

But critics insist that this is little more than a PR exercise.

Food expert and writer Joanna Blythman argues that Nestle's approach is a very good example of what is being described in some circles as "greenwashing" - an attempt to give a large company a much more eco-friendly image, whatever the reality.

"The danger really is that consumers don't trust Fairtrade, they just say 'come on, I thought I was buying into something that was generally ethical'."

The problem facing the Fairtrade Foundation is whether they can go mainstream without making too many compromises with big business, and whether core supporters will continue to stick with them.

The Money Programme: Not-so-fair trade. BBC Two at 7pm on Friday 10 March.

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