Are Fairtrade Prices Fair? An Analysis of the Distribution of Returns in the Swedish Coffee Market

Dick Durevall ()
Additional contact information
Dick Durevall: HUI Research, Postal: HUI Research, SE-10329 Stockholm, Sweden and Department of Economics, University of Gothenburg, Box 640, SE-40530 Gothenburg, Sweden

No 108, HUI Working Papers from HUI Research

Abstract: Consumers pay a premium for Fair Trade coffee, often assuming that it mainly benefits poor coffee farmers. However, several studies report that most of the premium accrues to actors in the consumer countries, such as roasters and retailers. This paper analyses how the returns to Fair Trade are distributed among bean producer countries, roasters and retailers, and Fairtrade Sweden, using scanner data on 185 products from Sweden and information about costs of production. The distribution depends on how much more costly it is to produce Fair Trade coffee compared to conventional coffee, given costs of beans and licences. Assuming the difference is 5 SEK per kg (about USD 0.80), which is on the high side, roasters and retailers get 61%, while producer countries, i.e., coffee farmers, cooperatives, middlemen, exporters and Fairtrade International, get 31%. The rest accrues to Fairtrade Sweden. These estimates are uncertain, but there is there strong evidence that Fair Trade retail prices are higher than the level attributable to the costs of Fair Trade beans and licences.

Keywords: coffee supply chains; ethic labels; Fair Trade premium; Fairtrade; market power; organic coffee (search for similar items in EconPapers)
JEL-codes: D43 O19 P46 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2015-02-22
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.hui.se/BinaryLoader.axd?OwnerID=3a57705 ... .pdf&Attachment=True (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.hui.se/BinaryLoader.axd?OwnerID=3a577059-d869-4d1b-bff1-5673eefc3461&OwnerType=0&PropertyName=EmbeddedFile_a9bc7cc4-49ec-4704-be41-3a9e2b1fa144&FileName=HUIwp108.pdf&Attachment=True [301 Moved Permanently]--> https://www.hui.se/BinaryLoader.axd?OwnerID=3a577059-d869-4d1b-bff1-5673eefc3461&OwnerType=0&PropertyName=EmbeddedFile_a9bc7cc4-49ec-4704-be41-3a9e2b1fa144&FileName=HUIwp108.pdf&Attachment=True [301 Moved Permanently]--> https://hui.se/BinaryLoader.axd?OwnerID=3a577059-d869-4d1b-bff1-5673eefc3461&OwnerType=0&PropertyName=EmbeddedFile_a9bc7cc4-49ec-4704-be41-3a9e2b1fa144&FileName=HUIwp108.pdf&Attachment=True)

Related works:
Working Paper: Are Fairtrade Prices Fair? An Analysis of the Distribution of Returns in the Swedish Coffee Market (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:huiwps:0108

Access Statistics for this paper

More papers in HUI Working Papers from HUI Research Handelns Forskningsinstitut, c/o HUI Research, Regeringsgatan 60, 103 29 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Hans Seerar Westerberg ().