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WThen, in 2017, Sainsbury's announced that it was considering developing its own "fair" brand, more than 100,000 people signed a petition condemning the move. Today, on the eve of the Fairtrade Fortnight, the fact that most supermarkets have moved away from the standards developed by the Fairtrade Foundation is worrying.
Some grocery chains have sought the approval of the foundation, but many have gone their own way. This means that most consumers do not know what organization does what to protect the wages and rights of workers in developing countries. Over the next two weeks, the foundation plans to focus its advertising efforts on cocoa farmers in West Africa and how the Fairtrade brand can improve their lives.
Later this year, the Fairtrade cocoa base price will increase by 20%, from $ 2,000 to $ 2,400 per tonne. The farmers' bonus for community projects will also increase by 20% from $ 200 to $ 240. This is great news for the farmers participating in the program – and the higher price is readily available in the pockets of chocolate lovers in the rich West.
It is a premium on the free market price today, which is around $ 2,260 a tonne, and protects farmers from the value declines that hit the industry in 2017, when it fell below $ 2 billion. $ 000.
However, the focus on cocoa reveals the limitations of the Fairtrade system, which used to be a popular alternative to most products sold in stores. There are standards for everything from cotton to gold and flowers, but these products are usually only available from specialized suppliers or the cooperative.
The foundation tried to persuade some wholesale buyers to buy only tagged products and had some success. For example, Transport for London has ensured that the safety vests provided to staff are made of Fairtrade cotton.
But more local authorities, government agencies and corporations have to follow this example, ensuring that when they spend thousands of orders, it is always for a Fairtrade product. .
Large companies, with their large personnel departments, have the resources to explain to their workers why Fairtrade is important for their purchases, and what it means for people who are at the other end of the production process. .
But in other areas, it is up to the Fairtrade Foundation to publicize its efforts and achievements – with the help of its most active members, such as Divine Chocolate.
It's a sad situation. After the great financial crash of 2008, a commodity boom from 2013 to 2017 has turned into a crisis that has deprived developing country farmers and governments of critical cash. At the same time that they managed to stabilize their finances and put money aside to invest, world prices fell and wiped out their profits. Fairtrade practices protect farmers from this type of setback and allow them to plan for the future.
Of course, they have their critics. These are mostly Americans, people who favor unfettered markets and seek to undermine the Fairtrade ideal, claiming that it is a form of protectionism that slows down the economy. Innovation and ends up ruining farms.
Their adherence to the free market is almost religious, which does not take into account the stability and security gains provided by Fairtrade and the size of the EU premium to promote universal education and women's rights.
But without major employers attempting to adopt the Fairtrade standard and transparent practices proposed by the foundation, it will be up to consumers to move the project forward.
Sainsbury's Asda merger is toasty, but investors are still hungry
In a letter sent last May to Rachel Reeves, Chair of the Selecting Business, Energy and Industrial Strategy Committee, Sainsbury boss Mike Coupe explained why the grocer was to merge with rival Asda. Discounters Aldi and Lidl "now define the criterion of value" in terms of food, he conceded. That meant Sainsbury's and Asda had to come together to compete better. "In this fast-paced environment, staying still is not an option," he warned.
Well, after the preliminary verdict of last week's watchdog, it looks like Coupé will be really still.
The Competition and Markets Authority said that the merger of Coupé would result in higher prices, fewer choices, lower quality, higher gas prices and less intense competition at the local and national levels . This could block the agreement, he said. Or that might allow – as long as a (very large) number of stores is sold to a single buyer. He could also order them to sell the Sainsbury's or Asda brands.
Cup, almost spitting with anger, suggested that he could bring this verdict to court. But the consensus is that his merger plan is toasted. He needs another plan, quickly.
When the merger agreement was unveiled last spring, Sainsbury's appeared to be the strongest of the two grocers, but Asda has performed better than Sainsbury's since. Analysts believe that if Walmart, the owner of Asda, wants to get an idea of the chain, a private equity buyer could emerge. Supermarkets attract private investors because they generate a lot of money.
If Coupé can not come up with a new big idea, shareholders may decide they need new leadership – which would not be a great time to let David Tyler, the long-time president, retire in March.
Or maybe it will be the moment we discover if Amazon is serious about an offer to buy for a grocery store in the UK?
Imperfect business model gives Purple Bricks a case of blues
Traditional real estate agents welcome the efforts of Purple Bricks, the online agency whose stock price dipped by 40% at one point last week, as revenue forecasts were slashed and its British bosses and American are gone.
Last Friday, Estate Agent Today, the industry news site, added to its setbacks by posting figures showing that of the 86,736 British properties listed for sale between Feb. 7 and Feb. 21, only 4,085, less than 5%, belonged to online agents.
Purple Bricks is dominant, with 71.8% of new listings for the online sector, but why, despite its multi-million pound advertising campaign, is not it more popular?
Maybe his business model is fundamentally flawed. To sell through Purple Bricks, sellers must pay an initial commission of £ 899. If the property does not sell, they get nothing for their money. Street agents charge a lot more, but only if they make a sale.
In a rapidly changing market, the Purple Bricks offer makes sense: the number of homes listed makes it easy to price a property. And £ 899 may seem like a bargain compared to the big price that a traditional agent will charge even on a property that sells in a few days.
But on a slowing market – most of southern England at the present time – sellers can poorly choose a real estate property and never find a buyer. Even in a "normal" market, only 58% of the houses listed in traditional agents find a buyer. Purple Bricks says its conversion rate is 75%, but that means that a quarter of its customers are paying £ 899 for nothing.
Tellingly, last week, Purple Bricks announced that in the United States, the fees would only become payable at the end of the work. The pressure will increase for the same thing here – but that could leave Purple Bricks with a reduced initial cash-flow and, with a 75% sales conversion, reduce revenues by a quarter.
It could be a long time before the big early investors in Purple Bricks, such as star fund manager Neil Woodford, see much return.
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