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Tue, Nov 23, 2004 - Page 12 News List

Coffee giants move into `ethically aware' market

THE GUARDIAN , LONDON

The two largest coffee roasters in Britain, Nestle and Kraft Foods, are planning to launch their own ethically aware brands next year in the hope that some of the success enjoyed by Fairtrade-certified products will rub off on them.

The US food combine Kraft -- which owns Kenco, Carte Noire and Maxwell House -- is preparing to add a brand likely to be called Kenco Sustainable Development to its regular product lines on supermarket shelves.

Kraft is proposing to pay farmers who adhere to its ethical criteria a 20 percent premium on the price of green coffee beans on the open market, which this year was about US$1.43 a kilogram. The payment would be significantly less than the flat rate of US$2.66 paid to farmers under the Fairtrade scheme.

Kraft's plans have outraged the Fairtrade Foundation, set up 12 years ago by a group of charities that saw multinational roasting firms squeezing meagre profits made by small-scale farmers in the developing world. Some 70 percent of coffee comes from small farms.

Fairtrade believes that rival certifications could damage the consumer appeal of the niche market for coffee produced to high ethical criteria.

"We think it is bound to confuse people," the foundation's deputy director, Ian Bretman, said. "When people suggest these initiatives are `like Fairtrade,' we have to point out they are, in fact, not Fairtrade."

Kraft is racing to beat market leader Nestle to market with an ethically branded coffee. Nestle, which makes Nescafe and Alta Rica, is understood to be preparing its own Fairtrade-style product under the Nescafe brand.

With UK coffee consumption having shrunk by 2 percent in six years, the success of Fairtrade brands such as Cafedirect has been watched covetously by the multinational roasters. Nestle and Kraft, however, have refused to launch a Fairtrade-certified brand, despite lobbying from charities and a stream of requests from customers.

Instead Kraft -- which also makes Philadelphia and Dairylea cream cheeses as well as Terry's Chocolate Orange and Toblerone -- has asked New York-based charity Rainforest Alliance to provide its cut-price ethical certification.

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