Scandinavian Working Papers in Economics

HUI Working Papers,
HUI Research

No 108: 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

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

JEL-codes: D43; O19; P46

25 pages, February 22, 2015

Full text files

BinaryLoader.axd?Own....pdf&Attachment=True PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Helena Nilsson ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-02-05 20:50:25.