Changing Big Business

Changing Big Business

The Globalisation of the Fair Trade Movement

Anna Hutchens

Drawing on candid accounts from practitioners, producers and industry representatives, this informative and proactive volume investigates the challenges facing today’s fair trade movement and provides unique insights into the workings of social and economic power in world markets.

Chapter 3: The History of Fair Trade

Anna Hutchens

Subjects: business and management, entrepreneurship, development studies, development studies, economics and finance, international economics


Since the mid-twentieth century the fair trade movement has sought to bring about a fairer trading system that empowers small-scale producers in international markets. Operating initially within alternative niche markets serviced solely by religious, charity and non-profit alternative trading organisations (ATOs), fair trade was pursued through a system of product certification and labelling in the late 1980s. Designed to enable any company to sell fair trade products to consumers provided they met certain criteria, fair trade expanded into dominant or ‘mainstream’ commercial supply, distribution and retail channels. While the ATO movement has remained vital during the system’s growth, a number of ATOs also reinvented the traditional ATO with a commercial twist – a for-profit brand company – to take the ATO model of fair trade into the ‘mainstream’. The certification model and ATO model of fair trade are respectively governed by Fairtrade Labelling Organizations International (FLO) and the International Association for Fair Trade (IFAT). The movement’s continued and rapid market growth worldwide has introduced multiple challenges and provoked a deep discord between its two major constituencies and models, reflected in the evolution of their different governance institutions. This chapter introduces the groups, models and institutional structures that have underpinned the movement’s development and form the basis of the analysis in later chapters in the book. FAIR TRADE IN CONTEXT: FREE TRADE THEORY, FREE TRADE REALITY More than two-thirds of those living on less than US$1 per day (one-fifth of the world’s population) are located...

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