Fairtrade And Wine
/Why do we have Fairtrade Wine?
Poor working and living conditions have been the norm for many workers in the wine industry, particularly those operating in some of the world’s most underdeveloped, isolated and poverty stricken nations.
Notably, wine, producers in South America and South Africa have had unique social, political and economic challenges to deal with.
The legacy of apartheid in South Africa, for example, and low and inconsistent market prices in South America have meant wine growers there are often exposed to an unpredictable future.
Fairtrade wine first went on shelves anywhere in the world in the UK in 2004, and with it brought guarantees that farmers could cover the costs of production and support grape growers to maintain ownership of their land against the pressure of large business.
How does Fairtrade help wine workers and growers?
Fairtrade guarantees growers and producers a fair price for their grapes. This is known as the Fairtrade Minimum Price, which aims to cover their average cost of sustainable production, or the market price, whichever is higher.
They also receive the Fairtrade Premium, where wine producers and their commercial partners will pay additional money to help invest in social and economic initiatives in their communities.
These can include projects that provide funds to improve farm and viticulture practices, or support specific education, healthcare and training programmes that not only benefit the wine growers and the workers, but also their families and people in the wider community.
Worldwide sales of Fairtrade wine
2014 saw a record breaking 22.2 million litres, the equivalent of 30 million bottles of Fairtrade wine sold globally, an increase in sales volumes of 6%. There are now 9,800 hectares of wine around the world dedicated to producing Fairtrade wine.
This not only reflects the growing influence and understanding of the FAIRTRADE Mark amongst consumers and the international wine trade, but a willingness amongst larger wine producers, in relevant countries, to switch to Fairtrade certification.
The record sales resulted in a Fairtrade Premium of Euros 873,600 in 2013, available for investment in community projects.
There are now 45 producer organisations and wineries globally involved in making Fairtrade wine. The top selling markets are the UK, Germany, Sweden and the Netherlands. But the countries showing the highest growth are South Africa, Norway, Canada and Denmark.
This breaks down as:
- 26: South Africa
- 9: Chile
- 8: Argentina
- 1: Brazil
- 1: Lebanon
But there are big differences around the world about how much Fairtrade wine is being consumed.
UK accounts for half of Fairtrade wine sales
The UK is far and away the biggest consumer of Fairtrade wine, accounting for half of total global sales. UK sales were up 9% year-on-year between 2013/2014 to 10.8m litres, a value of £27.5m.
The Co-operative’s role
The UK's large market share can be attributed in main to the commitment and work done by The Co-operative retail group, which has been a strong supporter of the Fairtrade movement since its inception in 1994.
It sold the world’s first Fairtrade certified wine, a Carménère from Chile, back in 2004, and has since expanded to become the largest retailer of Fairtrade wines, not just in the UK, where it commands 66% of the market, but worldwide where it has a 32% share.
The Co-operative claims to sell one in three Fairtrade wine bottles sold anywhere in the world and two out of three in the UK. It reports it sold 8.2m Fairtrade wine bottles between October 2014 and October 2015.
The Co-operative’s Fairtrade wine range now includes up to 25 products from all three major Fairtrade wine producing countries, Argentina, Chile and South Africa.
Swedish Fairtrade sales soar
Fairtrade wine sales in Sweden soared by 52% in 2013 to £4.2m. This was down to the country’s state-owned drinks monopoly, Systembolaget, increasing its focus on ethical based tenders for wine suppliers.
German discounters boost sales
Germany saw its sales of Fairtrade wine increase by 32% in 2013 to £810,000 as Fairtrade wine became widely available in the big discounters, such as Aldi, Lidl and Netto.
Which countries produce Fairtrade wine?
South Africa is currently the largest producer of Fairtrade wines, accounting for two thirds of total Fairtrade wine sales. It has 26 certified producers over 68 farms, and employs over 2,500 workers, but this only equates to around 5% of the country’s overall wine production.
Chile also produces a high proportion of Fairtrade wine with nine certified producers.
Argentina has eight certified Fairtrade wine producers, including La Riojana, which is not only the world’s first certified Fairtrade wine producer, but its biggest single producer of Fairtrade wine with over 50 million bottles a year.
* Other countries, which produce Fairtrade wine, albeit on a smaller scale, include Lebanon and Brazil, both of which have one certified wine producer each.
What Fairtrade wine means to the Fairtrade movement?
Anna Pierides, product manager at the Fairtrade Foundation in the UK, explains why Fairtrade wine has become such an important category in helping consumers to better understand Fairtrade products, and its commercial benefits.
“Fairtrade wine continues to display a positive and healthy level of growth, both globally and in the UK. The UK is the largest seller of Fairtrade wine in the world, and this is indicative of the growing customer demand and appreciation of the good quality of Fairtrade-certified wines.
Fairtrade wines have been winning more and more industry awards year on year, which is a real boost of confidence for producers and retailers.
We continue to engage with business partners to ensure that Fairtrade wine availability and visibility in the UK market is prevalent. Some retailers are particularly supportive of Fairtrade in the wine category with The Co-operative being the leading stockist of Fairtrade wine, and selling the largest volume in the UK and globally.
Since donning the retailers’ shelves just over 10 years ago, Fairtrade wine has come a long way. We have witnessed a steady growth of retail own label Fairtrade wines, and more recently the brands who have certified some of their wine variants to Fairtrade. This is a reminder not only of customer demand, but also of the prevailing importance and need for ethical certification in the wine industry.
The next few years will be an exciting time for Fairtrade wine, and we are confident the growing demand will generate significant economic benefits for the producers, and their families.”
