What is fair trade?

Buying goods at a fair price to protect people and the earth
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The term “fair trade” has become somewhat of a buzzword lately, but what is it, and why do we care about it?

Put simply, fair trade means buying goods at a fair price from people who produce them. In exchange, producers use sustainable production practices and uphold fair working standards for their employees, benefiting both the earth and the communities involved.

Guaranteeing fair prices

Prices for many of the ingredients we use – cocoa, almonds and coffee are just a few examples – can change unpredictably because of factors like global demand, extreme weather or crop failures. While fluctuating prices may not be a problem for larger farms, small producers can find it challenging to make a profit when their products’ prices fall.

In a fair trade agreement, the product being traded is given a minimum price. Even if the average market value falls below this point, the seller is guaranteed to be paid the set minimum. On the other hand, if the market price rises above this minimum, the purchaser pays the higher price instead. In this way, producers are protected from dips in prices while also benefiting from surges.

Sympathy For The Skin Hand and Body Lotion, made with fair trade cocoa butter

 Sympathy For The Skin Hand and Body Lotion, made with fair trade cocoa butter

Purchasers also pay an additional fair trade premium every time they buy from a fair trade supplier. These premiums can be invested in community development areas like access to clean drinking water, food security, childcare, education services, alternative energy sources and reforestation projects.

Protecting employees and caring for the earth

To become fair trade certified, producers must agree to uphold fair standards regarding employees’ compensation, scheduling and workplace safety. Some industries are known for using child and slave labor, so to ensure that we don’t support or take advantage of these practices, it’s important for us to establish these expectations with our suppliers.

Producers must also agree to use environmentally sound farming and production practices in order to be certified fair trade.

Fair trade at Lush

Look at any of our products’ ingredient lists and you might find the phrase “fair trade”: this identifies which ingredients have been certified fair trade by an organization like Fairtrade International, Fair Trade Federation or Fair For Life.

Many of our ingredients have been certified fair trade, but many others haven’t. This can be because they’re grown in a country that isn’t covered by certifying organizations, or because they aren’t produced on a large enough scale to be eligible for certification. Sometimes, certification fees are just too expensive for the supplier.

In some of these cases where the supplier hasn’t been fair trade certified, we set up a direct trade relationship in which we pay them a fair trade rate and premium for their products and require them to abide by the standards around fair working conditions and sustainable practices outlined above. This is a win-win workaround for both us and the supplier!

Where we go from here

Our aim is to nurture existing relationships and develop new ones with suppliers for all of our ingredients. This way we can ensure we’re contributing to fair wages, environmental sustainability and good working conditions. Through direct trade, mutual respect and regular visits, we have found ways to make our trade partnerships stronger while ensuring that prices and conditions are right and fair.

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