Update on Fair Trade USA’s Draft Labeling Policy

In April, Fair Trade USA released a new draft labeling policy for multi-ingredient products, proposing to maintain a threshold requirement of just 20% fair trade ingredients while eliminating the requirement that all ingredients available as fair trade be included in fair trade form (“commercial availability”) and without adopting a requirement to disclose the percentage of actual fair trade ingredients included in the product. Fair World Project responded by submitting comments directly to Fair Trade USA and publishing a press release and blog describing our concerns that this policy is ultimately harmful to committed brands and producers as well as misleading to consumers.  Our assertion that the policy is deceptive is backed up by a survey conducted online by an independent researcher of more than 1,000 consumers that clearly demonstrates the use of the “Fair Trade Certified Ingredients” and “Fair Trade Certified [Specific Ingredient]” labels as permitted under the draft policy are misleading to consumers.  View Fair Trade Testing report as PDF file (1MB)

At this point, the open comment period on the draft policy is closed and we are awaiting word on the final policy.  However, the dialogue continues. And Fair Trade USA is publicly changing their arguments to justify their draft policy. For example, earlier this week, Fair Trade USA stated in an article that the reason for eliminating commercial availability is that in the US most sugar is sourced domestically, meanwhile not giving a reason for not requiring threshold disclosures. We submitted a response to these misleading statements:

Fair Trade USA has yet to provide a credible argument for their refusal to implement a basic level of transparency in its labeling policy.

The problem with a 20% threshold of certified ingredients with no accompanying disclosure of actual threshold or requirement that all ingredients commonly associated with fair trade be certified is not that composite products include domestic ingredients, it is that there is no standards or auditing for the other 80% and therefore no guarantee that a major ingredient, like sugar, is not purchased under exploitative conditions (either domestically or internationally).

This argument that companies are buying domestic sugar and that is why their policy is changing is both new and misleading. As stated in the article, Fair World Project was consulted as Fair Trade USA worked on this new policy. The exact wording of the option that was proposed was, “Businesses determine which ingredients will be Fair Trade except for commodities that are high profile, coffee/cocoa/tea, which must always be Fair Trade. After they determine which ingredients will be Fair Trade, they receive a label based on labeling policy.”

This was a question about business choice, not domestic sourcing. If Fair Trade USA would like to have a conversation about whether in the context of the United States specifically sugar may be considered an ingredient that is typically sourced domestically rather than one that is commonly associated with fair trade, we should have that discussion with broad stakeholder input. It should not be unilaterally decided as a justification for an otherwise deceptive and detrimental labeling policy that ultimately misleads consumers and undermines brands that are sourcing all or most ingredients from marginalized smallholder farmers under fair trade terms.

We will continue to call on Fair Trade USA to be transparent about their decision-making and to implement a policy that is clear to consumers and accountable to small-holder producers, workers, and movement-oriented brands and will update our website in the case of new developments.