Annual report 2010 | Fair Trade Original by Fair Trade Original

Change the world drinking tea

Annual Report 2010

Fair Trade Original Beesdseweg 5 PO Box 115 4100 AC Culemborg The Netherlands

Tel +31 (0)345 545151 Fax +31 (0)345 521423 info@fairtrade.nl www.fairtrade.nl

Contents Preface About this Report

4 7

Fair Trade Original: the organization Coffee in Guatemala: good advice is worth its weight in gold! Strategy Risk management Organization chart Profile of the Management Board Stakeholders External standards Memberships and collaborative arrangements

10 11 13 14 16 16 18 19

Fair Trade Original in the Netherlands Sugar on Mauritius: Fair trade certification is a fact Trade that develops Financial results for 2010 Food Gifts & Living Marketing Attention to environmental issues Working at Fair Trade Original

22 23 23 27 31 36 39 41

Colophon

Fair Trade Original at the trading partners The search for ecologically responsible leather Access to the export market Approach Fair trade principles Offering opportunities to disadvantaged producers Care for the environment Powerful entrepreneurs Development programmes Change the World Branding Change the World Drinking Food safety, quality & traceability in fair trade Capacity building of African fair trade chains List of trading partners Digitalization, fed by the African sun

46 47 47 51 51 54 54 57 57 62 63 64 67 70

Annual Accounts 2010 Annual Accounts Fair Trade Original, 2010

GRI Index

Copy: Fair Trade Original Photos: Fair Trade Original Remko Kraaijeveld, pages 4, 22, 54 Sjoerd Eickmans, pages 5 and others Mark Prins, page 6 Marcel Maris, page 9 Henne Vermeer, page 21, 23 Design and layout: Studio Bassa, Culemborg

Preface Fair Trade Original is synonymous for trade that develops: the organization is characterized by its unique combination of a commercial approach to the trading operations with the structural development of the organization’s trading partners in Asia, Africa and Latin America. Fair Trade Original’s operations pivot on the improvement of economic and social sustainability at its trading partners and producers. This is achieved by marketing a comprehensive range of food and gifts & living products and improving their distribution, in particular on the Dutch market, in combination with giving shape to development programmes focused on the organizations and on the individual farmers, craftsmen and employees of the production companies. Consequently, corporate social responsibility is integrated in Fair Trade Original’s DNA. Notwithstanding - or, conversely, possibly due to - the continuing financial and economic crisis it is clear that the government, business community and consumers are growing increasingly aware of the necessity of socially responsible action, not only to provide for a fairer distribution of wealth between the world’s current generations, but also to safeguard the earth’s limited resources as the source of life for future generations. This Annual Report 2010 is the first to be prepared in accordance with the Global Reporting Initiative (GRI) guidelines. This form of reporting gives explicit shape to the sustainability and transparency themes as detailed further in terms of the People, Planet and Profit key concepts.

When interpreted in terms of Fair Trade Original’s operations, this implies a focus on: • People: ranging from producers and trading partners in developing countries - who make the products and are ultimate target group of development trade - via the organizations and their staff in the various logistics chains and via Fair Trade Original’s staff right through to the consumers of the food and gifts & living products; • Planet: the chain’s attention to the responsible use - and, where feasible, reuse - of raw materials and other materials, transport and energy; • Profit: in addition to proportional profitability for all the partners in the chain, continual endeavours to conduct trade that results in the economic and social development at and for the producers and trading partners and which is linked to the promotion and influencing of the purchasing behaviour of a growing group of fair trade product consumers. This first GRI-compliant Annual Report also imparts an incentive to the further detailing of the substance of Fair Trade Original’s sustainability policy for the future. This policy is, in particular, focused on: • endeavours to achieve a structural improvement in the producers’ income: from the local minimum wage to a living wage; • an integral review of the chain, from the use of raw materials right through to the shelves in the shops, of measures that will reduce the environmental impact and the implementation of those measures on the basis of priorities;

Bee-keeper in Guatemala. Development trade’s ultimate target group is the producers in developing countries who actually make the products.

• the continual provision of information to stakeholders - including the stakeholders in developing countries and the Dutch business community, consumers and government bodies - about the need for and value of the continued growth of sustainable development and the enhancement of their involvement in this development.

Pioneering role It is gratifying to observe that a continually increasing number of food and non-food companies are embracing corporate social responsibility. Nevertheless, Fair Trade Original continues to be confronted with the challenge of fulfilling the organization’s pioneering role in a growing number of product groups and at an increasing number of producers. For this reason we shall continue to devote a great deal of attention to our endeavours to ensure that new products comply with the fair trade principles and that a gradually increasing number of producers are offered commercial prospects for sustainable operations on the market. The turnover generated by fair trade products, notwithstanding the economic recession, continues to increase. In addition to the increasing range of fair trade products available in a continually increasing broader market, a continually growing number of consumers regularly purchase fair trade products.

Ups and downs However, a number of other developments give cause for concern. The extreme increases in the price of a variety of raw materials can often be passed on only in part -

and with difficulty - in retail prices. This has imposed and is imposing pressure on the margins in the food sector. Over the years the price competition between the supermarket chains has resulted in the Netherlands developing into a low food price ‘island’ in Europe. Fair Trade Original’s food products have also suffered from this price competition which shows no signs of abating within the near future. Fair Trade Original has reduced the number of new products being developed in the gifts & living segment, but has at the same time elevated the quality and appeal of the products to consumers to a higher level. The Dutch design formula, developed in cooperation with local producers in developing countries, is increasingly bearing fruit. This formula is also enabling us to open up new sales channels alongside the Worldshops and, in so doing, reach a broader group of consumers. In addition, the development and marketing of products made from reused and environmentally-friendly materials has been continued with a great deal of success in 2010. However, the marketing of fair trade gifts & living products has been making a loss for many years. Although the decline in turnover recorded during the past years was halted in 2010, the current turnover is too low to achieve a turnaround. For this reason it will be necessary to review other options for the segment’s operations and implement the necessary measures. The substantial subsidies we received in 2010 - in particular, from the Ministry of Foreign Affairs - once again enabled us to continue the development programmes at our trading partners and producers. These programmes

These design vases, designed by Piet Hein Eek and made by Vietnamese craftsmen, appeal to a new and broad group of consumers.

are explained in more detail later in this Annual Report. The Ministry’s five-year Co-financing scheme (Medefinancieringsstelsel, MFS-1) was concluded at the end of 2010. A joint application for the coming five years, submitted by a number of fair trade organizations which included Fair Trade Original, was rejected during the application procedure. This rejection was not due to the substance of the application, but rather to the failure to comply with the stipulated administrative requirements. Although the subsidy policy within the scope of the MFS-2 Co-financing scheme was to assign a high priority to the social and economic conditions in developing countries, subsidies for the development of development trade which fair trade promotes and achieves, in particular, have completely missed the boat. This is a further alarming development that Fair Trade Original shall need to deal with during the coming period, especially since the full financing of the development programmes from the regular wholesale income would not appear to be feasible. Conversely, a favourable development is the Nationale Postcode Loterij’s designation of Fair Trade Original, together with the National Association of Worldshops and the Max Havelaar Foundation, as a beneficiary of the lottery’s funds. The objective is to conduct public campaigns designed to achieve fair trade’s breakthrough in the Netherlands.

The strength of the brand Fair Trade Original is confronted, as outlined above, with a number of major challenges in the future. Fair Trade

Original’s position as a marvellous, strong brand which is synonymous with a unique, structural approach to cooperation with trading partners and producers in Africa, Asia and Latin America, certainly offers prospects for the organization’s ability to meet these challenges. This strength is observed and appreciated, as is evident from the business community’s increasing interest in linking up with the Fair Trade Original brand. An increasing number of companies are seeking opportunities to integrate corporate social responsibility in their procurement policy and, consequently, are contacting Fair Trade Original. The greatest challenge will lie in implementing these new forms of cooperation in a manner that will ensure the progress in the developments which Fair Trade Original advocates can continue at full speed. Mike Jansen

Managing Director Fair Trade Original

Mike Jansen: ‘The brand’s strength is opening a continually increasing number of doors for Fair Trade Original’s products.’

About this Report This is the first Fair Trade Original Annual Report to comply with the international sustainability reporting standards. The Report reviews all the relevant developments that took place in 2010, and is based on the G3 guidelines of the Global Reporting Initiative (GRI) and the guidelines issued by the Dutch Accounting Standards Board. The information contained in this Annual Report is intended for interested customers, consumers and members of the public, subsidy providers, cooperation partners and other stakeholders. The importance of the issues was determined following a materiality session held at the beginning of 2010 and a comprehensive screening of the GRI issues, as well as an estimate of the issues that could be of importance to the relevant stakeholders. p The information contained in this Annual Report can be located using the table of contents and the GRI table with references to the relevant pages. This table is based on the G3 guidelines that are enclosed on page 89. The GRI has adopted levels of application in the G3 guidelines. Fair Trade Original hereby declares that the C level of the G3 guidelines is applicable to its Annual Report 2010. More information about the GRI’s G3 guidelines is available here.

Scope of this Annual Report Section 1 focuses primarily on the manner in which the chain’s strategy can enhance the Fair Trade Original principles and brand and on the provision of an insight into the organization and its environment. Section 2 reviews Fair Trade Original’s Dutch operations: Section 3

reviews Fair Trade Original’s activities at the trading partners in developing countries. The scope of the review of the operation’s environmental impact is limited to the Netherlands, where the organization has direct control of and can influence the impact. The environmental impact of the activities of the suppliers and trading partners is reviewed solely on the basis of examples and is of a qualitative rather than a quantitative nature.

Collection of information The information from the departments was collected from interviews with departmental staff and from qualitative and quantitative questionnaires. These questionnaires were drawn up on the basis of the G3 indicators and the organization’s insights. Most of the information about the organization’s operations is based on invoices and on management information and records maintained by the organization or submitted by the suppliers on request. The necessary conversions of figures were carried out on the basis of factors from reliable sources and on specified protocols.

Online Annual Report This Annual Report has been published online (www.fairtrade.nl) and printed solely in a limited print run. In addition to saving costs, this is also beneficial to the environment. Adopting this approach enables you to read this Annual Report online or print solely the sections you need in hardcopy form. The annual reports of earlier years are also available online.

Your opinion on this Annual Report Do you have any questions or suggestions relating to this Annual Report? If so, you are welcome to submit your questions or suggestions to us via jaarverslag@fairtrade.nl.

Fair Trade Original: the organization

Hoofdstuktitel

Coffee in Guatemala: good advice is worth its weight in gold! Development trade in practice Agricultural expert López Castillo shows how coffee farmer Itzep Ramos can set up appropriate accounts for his coffee cooperative.

Edgar López Castillo is an agricultural expert at the Fedecocagua coffee organization. His duties are to provide advice on coffee cultivation and to gradually increase the professionalism of the cooperatives in the Quetzaltenango region affiliated with Fedecocagua. These cooperatives need to comply with the stringent (administrative) requirements imposed by many certification systems if they are to avoid the risk of frequent and expensive visits by auditors before they get their affairs into order. Many cooperatives do not have their own staff, which is a serious impediment to López Castillo’s work. His colleagues in the other regions in the country encounter the same problem. For this reason Fair Trade Original decided, in 2010, to provide six base cooperatives financial support to enable them to contract an in-house agricultural consultant for a period of one year. Each cooperative pays a small monthly contribution towards the wage costs. Six young coffee farmers recruited for this project possess the

training and experience required to provide assistance to their colleague farmers in their further development. Some of the farmers already had some experience with accounting and accounts, and all could use computers. Following some additional training the six thoroughly-prepared farmers began work at their cooperative, under the supervision of López Castillo and his colleagues. A seventh cooperative already had a member of staff suitable for these duties. A computer and a computer course were purchased for him, after which he was ready for his duties. Jorge Leonardo Itzep Ramos, 33, took up his duties at the Cooperativa Santiaguito in López Castillo’s region in the spring. Itzep Ramos, a coffee farmer who is also a member of the cooperative, began by updating the database of the 31 members and carrying out a precise survey of each coffee garden. This administrative documentation is a condition attached to many certification systems. The documentation also contributes to the trace-

ability of the coffee, a requirement imposed by many customers. Later in the year Itzep Ramos organized informational meetings on issues including fertilization, weed control and coffee quality. He also held a coffee tasting session to enable the farmers to experience the difference between different varieties of coffee. In addition, Itzep Ramos also visited the coffee gardens to reach agreement on measures the individual farmers will need to implement in the coming period to improve their production. The favourable experiences with this approach are expected to result in the larger cooperatives deciding to keep their agricultural consultants on after the first year. This is a little more difficult for the smaller cooperatives, although the feasibility of continuing the improvements at the smaller cooperatives by some other means will be reviewed.

Fair Trade Original: the organization

The organization Fair Trade Original is synonymous with trade that develops: the organization, a non-profit foundation, was formed in 1959 and imported the first fair trade products into the Netherlands pursuant to the No aid but trade motto in 1967. The organization has since evolved into an importer, wholesaler, brand name and coordinator of development programmes - a unique combination. Development trade ensures that the products of our trading partners and the producers they represent gain access to the export markets. Trade development creates jobs and income, and it initiates commercial and socio-economic developments that in turn increase the prosperity of the people involved, their families, their villages and, on occasion, the entire region. p Fair Trade Original’s products can be classified into the following categories: • food: coffee, tea, fruit juice, wine, culinary products, confectionary, sandwich fillings, nuts and herbs, etc. • gifts & Living: primarily tableware, interior decorations, fashion accessories and Christmas decorations. The products are marketed via four sales channels. The Gift Retail channel is primarily comprised of the Worldshops, WAAR shops, department stores such as Hema and De Bijenkorf, and a large number of web shops including Wehkamp.nl. Fair Trade Original’s Food Retail channel is comprised of supermarkets and organic food shops. The international channel encompasses customers outside the Netherlands, primarily international European fair trade organizations and international department stores. Sales in the Out of Home channel

are made via wholesalers, United Coffee, van Oordt the Portion Company and Fair Goods & Food.

Strategy 2011 will be a crucial year for Fair Trade Original. The organization is on the eve of taking a number of structural steps which are intended to demonstrate Fair Trade Original’s position and role as a successful development trade organization and assure its position and role in the future. Fair Trade Original’s objective - and, at the same time, greatest challenge - is to substantiate the claim made for the development trade concept. This concept is based on the philosophy that fair trade can, in the longer term, also be profitable trade. Two important principles governing the achievement of this objective are the credibility of the fair trade concept and the creation of a sound market position. The demand for products manufactured in a sustainable manner is increasing. Turnover generated by products with a sustainability seal of approval, such as those from Max Havelaar, Utz certified and Rain Forrest Alliance, has increased rapidly in the past years. Consumers have become more aware of sustainability (with attention to People and Planet) due to the attention the issue has received from the political arena, business community, consumer organizations and the media. This has contributed to Fair Trade Original’s evolution into a well-known fair trade brand name and has enabled the organization to benefit from the trend. However, Fair

Our vision Poverty and the unequal distribution of wealth constitute major obstacles to the well-being of individuals and the communities in which they live, impede development and create a continual source of tension and contrasts between individuals and groups in society.

Our mission Fair Trade Original intends to make a positive contribution to struggle against poverty by means of trade development in cooperation with selected trading partners and producers in developing countries. When conducting trade we attach paramount importance to profitable operations, sustainable relations, autonomy, and self-respect for the trading partners and producers.

Trade Original’s duties extend beyond solely marketing products bearing a seal of approval. The organization continues to give substance to the combination of marketing fair trade products and the achievement of structural economic and social improvements by the producers. Breakthrough into the mainstream market The acquisition of a strong position in the mainstream market is of strategic importance since this will enable us to reach a broad consumer target group and entice them to make regular purchases of our fair trade products. At the same time Fair Trade Original is endeavouring to enhance the fair trade concept, whereby priority is assigned to transparency and impact: consumers and customers expect us to be open about the added value offered by fair trade and the manner in which we give substance to the fair trade principles. Now our food products have acquired a permanent position in the supermarkets the retailers are imposing continually increasing requirements which are in line with those imposed on regular products, such as the reliability of deliveries, turnover rate and procurement margins. These requirements are manifested in the form of increased pressure on margins and more stringent quality and delivery standards. During the coming period Fair Trade Original will focus its activities in this channel on the expansion of the product range - both in the breadth and depth - with product groups that generate additional sales, turnover and margins. The sales via the licences concluded with a producer of portion packs and a coffee producer at the end of 2010

Fair Trade Original: the organization

are developing favourably. New cooperative arrangements (with third parties / licence holders) are certainly to be expected. This is still a relatively virgin channel for other Fair Trade Original food products: a structured approach will be adopted to the expansion of these operations in 2011, including the introduction of new packaging variants for existing products that are tailored to this channel. The sustainability of the packaging has been assigned a place on the agenda. The endeavours to achieve the gifts & living products’ breakthrough into the mainstream market are achieving little success. Unfortunately, sales in the Worldshops channel offer insufficient prospects for substantial growth in the future. The product range, in spite of a network of more than 350 stores and the enthusiastic efforts of thousands of volunteers, fails to reach a large proportion of the potential buyers. Moreover, although the range of fair trade gifts & living products is increasing, the mainstream market’s demand for these products is lagging. A study of the prospects for the Gifts & Living Business Unit that began in 2010 and was completed at the beginning of 2011 has revealed that further growth in the mainstream market with a justifiable commercial result using the current business model will not be a feasible proposition in the coming years. During the course of 2011 it shall need to become clear whether there are suitable alternative business and earning models. A-brand positioning TV commercials to provide thematic support to the Fair Trade Original A-brand were broadcast for the first time

United Coffee (formerly Koffiebranderij en Theehandel Drie Mollen) concluded a licence contract with Fair Trade Original for the sale of the well-known fair trade brand’s coffee and tea in the Out of Home market.

in 2010. This campaign shall be continued in 2011, with a total of eight different commercials distributed throughout the year. The objective is to draw consumer attention to Fair Trade Original’s broad range of fair trade products and the stories behind these products, as well as to promote purchases. The secondary objective is to support the trade in its sales of this unique, broadlypositioned fair trade A-brand. Raw material prices The prices of a large number of raw materials are increasing sharply. This increase is due both to the increasing demand from flourishing economies, in particular in Asia and Latin America, and to the increasing speculation in raw materials that has resulted in price increases of products including cocoa and coffee. Extreme weather conditions and political unrest have also contributed to the increase in the price of raw materials. These increases have imposed severe pressure on the margins, as Fair Trade Original’s customers are not prepared to accept price increases or are not prepared to accept them immediately. The careful monitoring and anticipation of price movements shall offer additional scope for the timely adjustment of selling prices to accommodate the changing conditions. Financing development programmes The financing application Fair Trade Original and the Fairtrade Alliantie submitted to the Ministry of Foreign Affairs within the context of the Co-financing scheme (Medefinancieringsstelsel 2, MFS 2) has not been accepted. For this reason Fair Trade Original shall need to adjust its expenditure after 2010 to maintain the level of the organization’s operating result. The emphasis shall

be placed on the development programmes at a - limited - number of strategic trading partners. During the coming year endeavours shall also be made to develop new programme proposals and tap alternative sources of financing, whereby Fair Trade Original shall seek cooperation with third parties in the private sector and take due account of the opportunities available within the scope of the objectives of the Fair Trade Assistance Foundation. p

Risk management Risk management is integrated in Fair Trade Original’s planning and control cycle. An annual inventory of the strategic risks is made at the beginning of each planning cycle. This inventory is followed by assigning priorities and formulating control measures. Periodic audits are conducted to verify the timely and adequate implementation of the risk control measures. As risk management is a dynamic process the organization adjusts its plans when circumstances give cause to do so. The increasing interest in fair trade and the organization’s decision to focus on the mainstream market have resulted in changes in the organization’s risk profile. Fair Trade Original’s USPs are an important condition attached to the long-term success of the organization, certainly in view of the increasing competition from mainstream market players. Moreover, the organization also benefits from an expansion of the distribution of its products that reduces the organization’s dependency on specific customers and sales channels. For this reason attention is focused on the enhancement of the brand, both via brand awareness, impact measurements and

Fair Trade Original: the organization

Private gifts and loans In addition to the aforementioned external financing from the government and various organizations, Fair Trade Assistance, a sister foundation that provides financial support to Fair Trade Original, receives donations and interest freeloans within the context of the 1000 x 1000 campaign from private individuals and organizations. Gifts are allocated to assistance to the trading partners: the funds from the 1000 x 1000 campaign are allocated to the working capital of Fair Trade Original and its trading partners as the need arises.

transparency and via the expansion of the distribution of the products. The other major risks to the organization relate to price risks, the increasing price of raw materials and the financing risks confronting development programmes. The management of currency risks by means of foreign exchange forward transactions proved effective in 2010, and this approach shall be continued in 2011. The movements in the price of raw materials are monitored closely to enable the organization to adjust selling prices to accommodate the changed circumstances in good time. The organization shall absorb the development programme financing deficit by restricting the costs, external financing and seeking close cooperation with third parties.

Organization chart Fair Trade Original, based in Culemborg, had 48 employees at the end of 2010. Food The structure of the Food Business Unitâ&#x20AC;&#x2122;s organization was changed in 2010. As from 1 January the product managers report to the Marketing department. Following the departure of the Business Unit Manager Food this position was discontinued. As from the same date the Managing Director bears the direct responsibility for procurement, supply chain management and the quality of the food products. The position of Sales Manager Food was created to provide for sufficient focus on the activities with the greatest potential for growth. The new Sales Manager Food took up his duties in October 2010.

Fair Trade Original: the organization

Supervisory Board (5 members)

Raad Managing van Toezicht Director (1 person)

Food Business Unit (18 persons)

Staff departments (15 persons)

Gifts & Living Business Unit (14 persons)

Business consultancy

Office Management

Business consultancy

Supply Chain

Human Resource Management

Product Management

Sales

Finance, ICT & Programme Management

Supply Chain

Account Management Trade Marketing

Sales Marketing

Sales Office Account Management Product Management, Food, Branding & Communications

Cash & Carry

The sales team is comprised of two account managers and a Trade Marketeer. The Sales Office was contracted, since the continually increasing number of customers making use of automated ordering methods (see also page 41, Jobs) has resulted in a structural decline in the volume of the Sales Office’s duties. Attention needed to be devoted to the harmonization of Marketing and Sales following the restructuring of the organization in 2010. This has resulted in the improved harmonization of new products to be introduced on the market. The first steps towards the improved cohesion of the marketing efforts and sales operations were taken at the end of 2010. Gifts & Living The Gifts & Living Business Unit was formed in the summer of 2007. This merger of the product management, procurement and logistics, sales and trading partner development has resulted in a closely-knit team with a pronounced entrepreneurial attitude. Short lines have been introduced for the decision-making and the decisiveness has increased. Business consultancy The three business consultants, who are responsible for the management of the development programmes at the trading partners, are members of the Food and Gifts & Living business units and, consequently, have direct links with the trade. One business consultant lives in Guatemala and works with the trading partners and producers in Central and Latin America. The Programme Manager, who is responsible for the audits of fair trade policy and for the coordination and financing of the devel-

opment programmes, is a member of the Finance & Control, ICT and Programme Management department. Staff departments The Managing Director is responsible for human resource policy and receives support from an HR consultant. The Secretariat is comprised of the Office Manager and a caretaker. Marketing Fair Trade Original formed a central marketing department on 1 January 2010. The three Food product managers are now members of this department, a decision which was taken to achieve a shift in the product managers’ focus from procurement and logistics to marketing. The other members of the department are communications consultants engaged in the provision of information to consumers, campaigns, communications with the media, corporate and internal communications, the house style and the website, and a Marketing Manager responsible for the department’s work. Finance and ICT The Finance staff department is responsible for the organization’s account and financial management. This department implements the internal control measures and gives substance to risk management. The Finance department is also responsible for the management of the insurance portfolio, preparation of external accounts, tax matters, cash and currency management, and the subsidy accounts. The Financial department is managed by the Controller, who also provides assistance to the Management Board on financial issues of a strategic nature. The Controller also manages the ICT

Fair Trade Original: the organization

F-Commerce Nieuws van Fair Trade Original 3

Nieuwe wijn Fair Trade Original introduceert vier nieuwe wijnen uit Zuid-Afrika. De biologische Sauvignon Blanc is door de Wijnalmanak direct verkozen tot sterwijn.

Fair + Green De nieuwe leerlijn van Fair Trade Original biedt het hoogst haalbare op dit moment in de milieuvriendelijke productie van leer in India.

Certiﬁcering

Na een lang traject zijn de eerste suikercoöperaties op Mauritius Fairtrade gecertiﬁ ceerd. Na een sterke daling van de suikerprijs, hebben de boeren weer hoop.

Jaargang 4 Oktober 2010 www.fairtrade.nl

Fair-Wisselen wordt nieuwste trend! En? FairWissel jij al? Als het een beetje meezit, wordt deze vraag in heel Nederland veelvuldig gesteld tijdens de Fairtrade Week die plaatsvindt van 21 tot en met 30 oktober. Het idee erachter is dat consumenten hun reguliere producten verwisselen voor een fairtrade variant.

Koop eens fairtrade koffie, chocolade, bananen of rijst. Geef een fairtrade designvaas cadeau of ga eten in een fairtrade restaurant. Op zo ontzettend veel plaatsen zijn inmiddels faire producten verkrijgbaar, dat het niet moeilijk is om iets te Fair-Wisselen. Wie dat heeft gedaan, kan het melden op de actiesite www.fairwissel.nl. Daar is ook te zien wie er allemaal nog meer meedoen. Op deze website staan bovendien alle activiteiten van de Fairtrade Week voor jong en oud. In de krant en op school Op 25 oktober valt bij heel Nederland de Fairtrade Week-krant op de deurmat. Deze krant staat boordevol informatie over wat er is te doen tijdens de Fairtrade Week. Bovendien levert de krant geld op: met de kortingsbonnen krijgen consumenten korting op fairtrade producten. Op dezelfde dag start de Fairtrade Restaurant Week. Meer dan honderd restaurants serveren tijdens deze week fairtrade menu’s. Wie op het werk collega’s, werkgever of cateraar enthousiast wil maken voor fairtrade producten kan meedoen aan de Fairtrade@work campagne. Ook wie op zijn of haar Universiteit of Hogeschool

Ad Kolkman

fairtrade onder de aandacht wil brengen, wordt op zijn wenken bediend. Basisscholen doen begin november mee aan de grote Fair-Wissel via het Nationaal Schoolontbijt. En Fairtrade Gemeentes grijpen de Fairtrade Week aan om hun titel eer aan te doen (lees meer op pagina 2). Op de winkelvloer Fair-Wisselen is op de eerste plaats heel gemakkelijk en leuk! Op www.fairwissel.nl staat waar fairtrade producten te koop zijn. Ter plekke wordt men met extra acties verrast. In de Wereldwinkel of bij WAAR kan iedere klant een cadeautje Fair-Wisselen. Wie de coupon uit de Fairtrade Week-krant samen met de kassabon van het cadeau inlevert bij de Wereldwinkel, maakt bovendien kans op een Fair Trade Original by Piet Hein Eek artikel. Iedere Wereldwinkel trekt een prijswinnaar. Ook supermarkten nemen massaal deel aan de Fairtrade Week. Een groot aantal Plus winkels bijvoorbeeld houdt een demonstratie met Fair Trade Original Aroma koffie en chocolaatjes van Tony Chocolonely. Bij Poiesz is Fair Trade Original leverancier van de week, Super de Boer

Maak kans op een Totale Fairtrade Make-Over

besteedt extra aandacht aan de koffie en bij Marqt kunnen de klanten Chocosticks proeven. Lees over de acties bij Deen meer op pagina 4. Jumbo besteedt direct na de Fairtrade Week vier weken lang aandacht aan maatschappelijk verantwoord ondernemen, waarbij fairtrade royaal aan bod komt.

Achter de schermen De Fairtrade Week wordt georganiseerd door Stichting Max Havelaar, de Landelijke Vereniging van Wereldwinkels en Fair Trade Original. Een aanzienlijk deel van de hierboven beschreven activiteiten is mogelijk dankzij samenwerking met de Nationale Postcode Loterij.

Ga naar www.fairwissel.nl, meld aan welk fairtrade product je hebt gekocht, en maak kans op een Totale Fairtrade Make-Over ter waarde van € 1.000. Je keukenkastjes, je fruitschaal, je badkamer, je garderobe, je kerstboom, je fiets, je … noem maar op. Alles wordt aangevuld en opgefleurd met de lekkerste, nieuwste, leukste, gekste fairtrade producten.

•

Kort Nieuw servies Wanneer Vietnamese pottenbakkers de binnenkant van hun kommen gla zuren, gieten ze glazuur in de kom, draaien de kom en gieten het glazuur er soepel uit zonder enig spoor na te laten. In deze serie, speciaal voor Fair Trade Original ontwikkeld, is juist wel zichtbaar hoe deze techniek werkt. Het servies in vier kleuren is verkrijg baar bij de Wereldwinkel en WAAR.

F_Commerce_2010-2.indd 1

8-10-10 13:37

The F-Commerce business relations journal, published twice a year, reviews Fair Trade Original’s activities in the market and at the trading partners.

Manager responsible for the availability and performance of the ICT systems. Fair Trade Original has outsourced much of the management of these systems to third parties. The ICT Manager supervises these third parties and their compliance with the service agreements.

Profile of the Management Board The management of the Fair Trade Original Foundation is entrusted to the Managing Director, Mike (M.F.J.) Jansen, who also forms the Management Board as specified in the Works Council Act. The Managing Director is appointed by the Supervisory Board and is the Chair of the Management Team. Fair Trade Original, as a development trade organization, has decided to set the remuneration of the Management Board at a level within the guidelines formulated by the Ministry of Foreign Affairs for organizations that receive development cooperation subsidies. The Supervisory Board met on five occasions during the year under review. The Managing Director submitted the 2010 budget and business plan to the Supervisory Board in February. The Supervisory Board approved the Annual Accounts 2009 in April. In March 2010 it became clear that the Fairtrade Alliantie, of which Fair Trade Original was a member, would not be entitled to a subsidy pursuant to MFS-2 from 2011 onwards. The Supervisory Board requested the Management Board to develop a number of scenarios for the achievement of a favourable operating result in the absence of the MFS subsidy. External consultants were requested to draw up an organization model that would provide for the optimum devel-

opment of both the Food and Gifts & Living business units. The Management Board submitted the results from this study to the Supervisory Board at the beginning of 2011. The Supervisory Board instituted an audit committee and a remuneration committee at the end of 2010, both of which are comprised of two members from the Supervisory Board. The audit committee is, under the responsibility of the Supervisory Board, entrusted with the supervision of the financial operations within the organization in general. The duties of the remuneration committee include the submission of a proposal to the Supervisory Board relating to the remuneration and allowance policy for the Managing Director, the preparation of the remuneration report, the submission of a proposal for the selection criteria and appointment procedure for the Managing Director and members of the Supervisory Board, as well as the recruitment, selection and proposal of candidates for the position of Managing Director and members of the Supervisory Board to the Supervisory Board.

Stakeholders Numerous groups of stakeholders are involved in Fair Trade Original’s development trade, each of which constitutes an indispensible link in the chain. The primary target group of development trade is comprised of the producers, underprivileged farmers, craftsmen and the employees of factories, farms and companies in Africa, Asia and Latin America. The development

Fair Trade Original: the organization

In 2010, the Supervisory Board was comprised of five members, who do not receive an emolument: Ms J. Schraverus (Chair) Chair of the Executive Board of the Flevoziekenhuis hospital. Chair of Fair Trade Original’s Supervisory Board since 2007 Mr H. de Grooth Register Accountant, Chair of the Ernst & Young offices in The Hague until 2006. Member of Fair Trade Original’s Supervisory Board since 2007 Mr M.J.O. Delfortrie Owner-Director of Artitec. Member of Fair Trade Original’s Supervisory Board since 2007 Mr M.J. Roos Chair of the Board of the Centraal Bureau voor Levensmiddelenhandel (‘Netherlands Food Retailers Association’, CBL). Member of Fair Trade Original’s Supervisory Board since 2010 Mr H.B.J. Mentink Director of Wheels4All, Chair of the Stichting Wereldwinkel Stedebroec (‘Stedebroec Worldshop Foundation’). Member of Fair Trade Original’s Supervisory Board since 2000

trade efforts focus on giving them more control of their work and life and on increasing their income. Fair Trade Original assesses the extent to which the organization achieves its objective by carrying out evaluations at the workplace (such as on farms and in workshops) and evaluations of the various development programmes.

ties provided by and the limitations of development trade. In addition to making information available in various publications and on the website, the organization also strives to give a rapid and adequate response to individual requests for information from parties including schoolchildren and students. p

The often highly intensive cooperation with trading partners (marketing and export organizations, farmers’ organizations and private companies) enables Fair Trade Original to achieve effective development of the producers. Joint reviews are carried out to assess how and where Fair Trade Original can make a contribution to improvements in the organization of the trading partners with the ultimate objective of improving the trade chain’s performance. Fair Trade Original’s training and deployment of local consultants contributes to ensuring that the countries of origin acquire the necessary knowledge. Moreover, these consultants simplify the interpretation of local knowledge and experience in terms of the knowledge and experience of the European customers. Fair Trade Original cooperates with governments in the production countries when this offers added value to the parties involved in the chain.

Fair Trade Original imports ready-to-use gifts & living products and some Food products from the developing countries. Some of the food products are prepared by professional processers in the European food industry, when the finished product is produced from raw materials imported from developing countries. The fair trade principles are specified explicitly in the purchase conditions of the food companies which assume the responsibility for the procurement of their raw materials.

The consumers and companies at the other end of the spectrum provide for the feasibility of fair trade by purchasing fair trade products. They opt for Fair Trade Original’s products in view of the added value which is created in the country of origin. For this reason Fair Trade Original devotes a great deal of attention to communicating the organization’s specific methods and its fair trade claim. In being open about its operations the organization endeavours to provide an insight into the opportuni-

In addition to the aforementioned stakeholders in the trade chain, Fair Trade Original also works closely with colleague fair trade importers and development organizations active in the fair trade sector. This cooperation and harmonization takes place at both national and international level. Fair Trade also regards donors such as the Ministry of Foreign Affairs and the almost nine hundred 1000 x 1000 members who make interest-free loans available as important stakeholders. A last important group of stakeholders is comprised of Fair Trade Original’s staff. Internal training and discussion meetings are organized to maintain their involvement in and knowledge of the fair trade principles at a high level. The organization harmonizes its policy by means including meetings with the Works Council and informational meetings.

Fair Trade Original: the organization

Online Fair Trade Original launched a fully updated website in the summer of 2010. An important new element - and the basis - of the new site is the online catalogue that visitors to the site can use to view Fair Trade Original’s current product range. Each product is accompanied by information about the origin and a link to the profile of the relevant trading partner(s). The profiles of some 80 trading partners have now been published on the website. The new website also includes a shop locator that consumers can use to search for shops in their area that stock Fair Trade Original products. Fair Trade Original also took the first steps in the world of the social media in 2010, with activities on media including Twitter, Facebook and YouTube. Fair Trade Original’s presence in the social media will be expanded further in 2011.

Fair Trade Original is fully aware of the importance of its stakeholders, and shall increasingly frequently and actively call on the contribution these groups can make in the coming years.

External standards Fair Trade Original, in its roles as an importer and wholesaler and as a development trade organization, complies with a number of external guidelines and is audited to verify compliance with those guidelines. Fair trade principles The World Fair Trade Organization (WFTO) and Fairtrade International (FLO-ev) jointly formulated the fair trade principles. These principles lay down the foundations of fair trade and are intended to provide an unequivocal definition of concepts including fair prices, good working conditions, the creation of chances for producers and farmers, and the protection of the environment. The working conditions principles are based on and comply with the standards of the International Labour Organization (ILO). WFTO is a member of ISEAL, a worldwide association for social and environment standards, and complies with the code of good practice for the design of standards. Fair Trade Original has adopted the aforementioned fair trade principles (see page 51 ff), implemented them in its operations and stipulates that the suppliers of its products shall comply with the principles. A number of organizations are involved in audits of the implementation of the fair trade principles. Within this context the following organizations are of importance to Fair Trade Original:

• EFTA Fair Trade Original a member of the European Fair Trade Association (EFTA) (see also: Memberships). The EFTA fair trade assessment was developed within the scope of this cooperative arrangement. Members of the EFTA use this assessment to audit the implementation of the fair trade principles by trading partners and producers of fair trade products. • Fairtrade International Fairtrade International (FLO-ev) draws up standards for the production and sales of fair trade products. Products that comply with the FLO-ev fair trade standards are awarded the Max Havelaar fair trade seal of approval. The large majority of Fair Trade Original’s food and coffee range bear this seal of approval. • National Association of Worldshops The National Association of Worldshops has approved Fair Trade Original as a supplier of fair trade products. Pursuant to this approval the organization is authorized to sell products to Worldshops. The National Association of Worldshops has developed an in-house system for audits to verify the suppliers’ implementation of the fair trade criteria. Other standards Fair Trade Original markets products that comply with the prevailing health and environmental requirements. Self-evidently, Fair Trade Original is organized in a manner that ensures compliance with the relevant legislation and regulations. Moreover the organization was awarded HACCP certification in 2010, a system which provides for a food quality risk inventory. This system was implemented with the objective of eliminating risks of product quality shortcomings.

Fair Trade Original: the organization

Staff of an apple farm in South Africa. Appropriate working conditions are an important element of the fair trade principles.

As from this year’s Annual Report, Fair Trade Original also complies with the Global Reporting Initiative’s sustainability reporting guidelines.

Memberships and collaborative arrangements Fair Trade Original, in its role as a development trade foundation, operates within a field with many national and international organizations that promote fair trade. In view of the geographical and economical scope of these activities intensive cooperation with like-minded organizations is the sole effective means of endeavouring to achieve this shared ultimate objective. For this reason Fair Trade Original attaches paramount importance to cooperation with and within the following organizations. European Fair Trade Association. Fair Trade Original and colleague European organizations founded the European Fair Trade Association (EFTA) in 1987. 10 organizations in nine European countries are currently affiliated with EFTA. EFTA is a network organization in which the members exchange information about producers and products. EFTA has set up its own database of trading partners, FairData, and has established a Fair Trade Advocacy Office in Brussels together with WFTO Europe and FLO. World Fair Trade Organization Fair Trade Original has been a member of the World Fair Trade Organization (WFTO) since its foundation. WFTO is an association of some 350 fair trade organizations all

Fair Trade Original: the organization

over the world and is active in 70 countries. Both producer groups in developing countries and trading organizations in the North are active in the association. The association’s objective is to increase the standard of living of small producers in developing countries by the promotion of trade and lobbying of governments. Fair Trade Original suspended its membership in the year under review since the financial policy the WFTO has conducted in the past years and the manner in which WFTO has developed the fair trade monitoring system has undermined the organization’s confidence in the current Management Board. The general members meeting will appoint a new Management Board in 2011. Following the election Fair Trade Original shall give consideration to the continuation of its membership. PSO Fair Trade Original is a member of PSO, an association of almost sixty Dutch development organizations. PSO is focused on the capacity building of social organizations in developing countries. In 2010, Fair Trade Original received PSO financing for the capacity building of African fair trade chains (see also Section 3). FaiRSupport Fair Trade Original’s Managing Director is a member of the FaiRSupport Foundation’s Board. The FaiRSupport Foundation provides the central commercial services to the 355 Worldshops and seven WAAR shops. Nationale Postcode Loterij Fair Trade Original, together with the Max Havelaar Foundation and the National Association of Worldshops, has been assigned the status of a beneficiary of the Natio-

The large majority of the products in Fair Trade Original’s food range comply with the Fairtrade International standards and bear the Max Havelaar Seal of Approval. Some products also come into consideration for the organic food seal of approval.

nale Postcode Loterij (NPL) in the period from 2010 to 2014. The objective of the lottery’s financing is to achieve a breakthrough of fair trade products in the consumer market. The NPL allocates part of the lottery proceeds to the support of charitable institutions that endeavour to arrive at a just and green world. Corporate Social Responsibility Standards Committee Fair Trade Original, together with the Max Havelaar Foundation and the National Association of Worldshops, is a member of the NEN Corporate Social Responsibility Standards Committee that has been entrusted with the responsibility of making the Dutch contribution to the development of the ISO 26000 standard since 2004. In addition, a member of the National Association of Worldshops has attended the international meetings of the working groups as a representative of the Business Community stakeholder group on Fair Trade Original’s behalf since 2007. On the adoption of ISO 26000 in 2010 the NEN Standards Committee completed its assignment. Other Fair Trade Original is affiliated with the Productschap Wijn (‘Wine Commodity Board’) and is a member of the EVO logistics organization. At a local level Fair Trade Original is affiliated with the Kring Culemborgse Bedrijven (‘Culemborg Business Community Association’, KCB).

Fair Trade Original: the organization

Fair Trade Original in the Netherlands

Hoofdstuktitel

Sugar on Mauritius: fair trade certification is a fact Development trade in practice Sugar farmer on Mauritius. 18 Mauritian sugar cooperatives have now been granted fair trade certification and a further 14 cooperatives are preparing for certification.

Fair Trade Original has exported cane sugar from Mauritius for many years. However, the sugar did not bear the Max Havelaar Seal of Approval - and this became a problem, since an increasing number of customers were interested in the sugar but wished to receive the guarantees offered by the seal of approval. Farmers wishing to come into consideration for the international fair trade seal of approval - which is issued by the Max Havelaar Foundation in the Netherlands - need to comply with a range of requirements and receive certification. Although this costs time and effort, it does offer access to a group of customers who are willing to pay more for the farmersâ&#x20AC;&#x2122; product. Fair Trade Original, in cooperation with its British Traidcraft and Craft Aid sister organizations, set up a programme to prepare the sugar farmers for fair trade certification. After a difficult start, the cooperatives which had registered for certification decided that they would not seek certification

as a group but rather on an individual basis. Although this increased the associated costs they could now set their own pace and would no longer need to wait until the weakest link in the chain had attained the required level. The final plan was ready in October 2008, and it was expected that the project could be completed within three months. However, a new problem arose: Gramoxone, a pesticide frequently used on Mauritius, is included on the fair trade seal of approvalâ&#x20AC;&#x2122;s list of prohibited pesticides since it can be harmful to the people who work with it. Although the pesticide had been withdrawn from the market some time previously, it proved difficult to dissuade the farmers from reverting to the use of the pesticide when supplies became re-available. They had had a poor harvest and the production costs were increasing - which explained the popularity of this cheap Gramoxone amongst the farmers. The Mauritian Farmers Service Corporation (FSC) farm procurement organization responded to this

situation by including the pesticide on their list of prohibited pesticides, as a result of which farmers could no longer buy the pesticide. Although this issue resulted in a considerable delay, it ultimately proved possible to continue the process. The five cooperatives involved were finally audited in mid2009. The final report was a disappointment: there were still a number of issues that needed to be resolved. One of these issues related to the ownership of the sugar at the time of processing, since if the ownership had been transferred to the sugar factories then they would also need to be certified. This problem was resolved by stipulating that the ownership of the sugar remains with the sugar farmers until the time that the product is exported. The five cooperatives were officially awarded their certificates at the end of 2009 and Fair Trade Original was then able to display the Max Havelaar Seal of Approval on the packaging as from the next procurement round that took place in the course of 2010.

Fair Trade Original in The Netherlands

Trade that develops Fair Trade Original intends to make a contribution to the improvement of the position of producers and workers in developing countries by offering a broad and successful range of fair trade products on the Dutch market. The organization intends to achieve this objective by making a high-quality and original product range available to consumers in the regular sales channels. This strategy is based on the conviction that fair trade producers benefit from access to the regular market channels as this access increases their trading volumes. Fair Trade Original’s trading partners benefit from fair trade conditions, although these can be developed solely when there is sufficient demand. Fair Trade Original intends to increase the producers’ income by generating increased turnover - an objective which, in the organization’s opinion, can be achieved by focusing on growth in the mainstream market that targets the general public.

Financial results for 2010 Market developments Fair trade has developed into an important consumer trend during the past years and plays a role in a continually increasing number of purchase decisions. This trend is manifested in consumer expenditure on fair trade, which increases each year: almost 500,000 consumers bought their first fair trade food in 2010. Fair Trade Original responds to this need by making a clearly recognizable and reliable brand available to Dutch consumers via the regular sales channels. Fair Trade Original intends to expand its position in the mainstream market by offering

a range of contemporary and high-quality products that are tailored closely to the target group’s needs. Fair Trade Original also maintains long-term business relationships with the Worldshops and WAAR shops. The organization endeavours, in cooperation with these fair trade shops, to work on the further growth and expansion of the range of fair trade products available to consumers wishing to make responsible purchases. This long-term cooperation is manifested in the form of joint product development and marketing efforts. The interest in fair trade products is also increasing in other channels, such as the Out of Home market: for example, the government has switched to sustainable purchases on a large scale and two licence holders have entered the Out of Home market with Fair Trade Original products. Fair Trade Original intends to utilize the resultant market opportunities and, where feasible, is seeking cooperation with partners who can enhance the organization’s proposition. The organization, with a strong Fair Trade Original brand - with a brand awareness that has now increased to 70% - and a unique development trade concept, is an interesting partner for cooperation. Wholesale activities The Fair Trade Original wholesale organization supplies fair trade products to Dutch and European retailers and wholesalers. The range is comprised of about 140 coffee and food products and 1,600 gifts & living products. Fair Trade Original procures its products from suppliers in Asia, Latin America, and Africa. The majority of ingredients and finished products are procured from trading

Ton Schoenmaker, Deen Category Manager. Deen was one of the supermarket chains that actively drew attention to the Fair Trade Original product range, including during the Fair Trade Week

The storage and distribution is outsourced to Van Uden Logistics, a specialized logistics provider with which the organization has entered into a long-term collaborative arrangement. Fair Trade Original has a sales team for the sales of food and coffee products which serves its customers on an account management basis. This approach is also applicable to the sales of gifts & living products, which are also distributed via the organization’s Cash & Carry service. The majority of the orders are processed by automated systems. Sales channels Fair Trade Original makes a distinction between four sales channels, namely Gift Retail, Food Retail, Interna-

The Food Business Unit’s turnover increased by 5% to € 15.6 million, equivalent to 84% of the organization’s total turnover. The Gifts & Living Business Unit recorded a 3% increase in turnover to € 3 million. The organization’s strategy of achieving growth in the sales channel had a favourable effect on turnover in

20 18 16 14 12 10 8 6 4

2010

2 2009

General development of turnover Fair Trade Original’s net turnover once again increased in 2010: net turnover increased by 4% to € 18.6 million. The extremely large increase in turnover in 2009 - 16% - could not be matched during the year under review. Nevertheless, 2010 can be regarded as a good year in view of the economic recession that confronted the Netherlands during the past twelve months. The organization was also able to achieve success in the Food Retail channel during the past year: this sales channel made the largest contribution to the increase in turnover.

Net turnover in 2006-2010, in million euros

2008

The development of new products is one of the organization’s essential duties, since this results in the coordination of the market’s needs and the feasibilities of the trading partners and producers. This is also largely applicable to the procurement of goods, when it is necessary to achieve a good match between the purchase conditions adopted by Fair Trade Original and its customers and the capacities of the trading partners and producers.

tional and Out of Home. The Gift Retail channel, which has for many years constituted the major sales channel, is comprised of the Worldshops, WAAR shops, department stores and a variety of web shops. Fair Trade Original understands Food Retail customers as supermarkets and organic food shops. The international channel encompasses customers outside the Netherlands. Fair Trade Original in Belgium is a major customer of, in particular, products in the Gifts & Living and coffee ranges. Fair Trade Original also supplies products to a wide range of fair trade-oriented organizations in Europe. The majority of sales in the Out of Home channel are made via third parties such as United Coffee, van Oordt the Portion Company and Fair Goods & Food.

2007

partners who represent networks of producers. Some of the products are manufactured in the Netherlands or other European countries using ingredients supplied by producers in developing countries. Fair Trade Original gives preference to the organization’s procurement of the raw materials. In some instances the procurement is outsourced to a production company, whereby guarantees are implemented for compliance with the fair trade conditions.

Fair Trade Original in The Netherlands

2006

8 7 6 5 4 3

2009

2010

2009

Out of Home

International

Food Retail

5 Gift retail

2010

Out of Home

International

Food Retail

Gift retail

Gift Retail was, once again, the sales channel with the greatest -turnover in 2010, although turnover declined by € 0.5 million to € 8.1 million. The largest proportion of the Gift Retail channel’s turnover has traditionally been generated by sales to Worldshops and WAAR shops - the very customer groups in which Fair Trade Original is now feeling the effects of increasing competition.

The operating result before interest and taxation increased by € 9,000 to € 320,000 in 2010. The € 44,000 increase in gross margin was accompanied by a € 252,000 decline in other income and a € 221,000 decline in costs. External financing Fair Trade Original received subsidies from the Ministry of Foreign Affairs, ICCO, Hivos and PSO totalling

2,000 1,500 1,000

0 (500) (1,000) (1,500) (2,000) (2,500) (3,000)

2010

500 2009

Movement in the margin The gross margin increased by 1% to € 5.3 million, lower than the increased turnover due to the increasing prices of raw materials and the increasing competition. The raw material prices of coffee and cocoa exhibited a particularly large increase. It transpired that these price increases could not be passed on to the organization’s customers or could be passed on to only a limited extent. This resulted in a decline in the gross margins on food and coffee products, in particular in the second half of 2010. Conversely, the gross margin on gifts & living products exhibited a recovery as compared to the previous year. Covering the dollar exchange risks enabled the organization to maintain the gross margin at the required level. Moreover, the organization succeeded in greatly reducing the depreciation on stock by the implementation of improved stock management.

Result before interest and taxation in 2006-2010, in million euros

2008

Net turnover by sales channel in 2009-2010, in million euros

The International and Out of Home channels are of less significance in terms of volume. Both channels generated increased turnover as compared to 2009. The turnover generated by the International and Out of Home sales channels amounted to € 1.6 million and € 1 million respectively.

2007

2010: turnover generated by the Food Retail channel increased by 15% to € 7.9 million. Sales of coffee and food increased to the supermarkets’ increasing interest in fair trade products. Almost all supermarket chains now number among the organization’s steady customers.

Fair Trade Original in The Netherlands

2006

€ 1.7 million in 2010. In 2009, income from subsidies had amounted to € 2.1 million. Costs The organization maintained appropriate control of the costs in 2010, which declined by 3% to € 6.8 million. The lower subsidies received during the year reduced the general costs incurred in the performance of subsidized programmes. On balance the costs, expressed as a percentage of turnover, decreased by 2% from the level in 2009 to 37%. Costs incurred in 2009-2010, in euros 2009

Fair Trade Original in The Netherlands

The personnel costs amounted to € 2.8 million, an increase of less than € 0.1 million as compared to 2009. The personnel costs, expressed as a percentage of turnover, remained at the 15% level of 2009. Balance sheet The balance sheet total at 31 December 2010 amounted to € 7.6 million (2009: 7.1 million). The value of the trading stock, € 3.5 million, was equivalent to 46% of the balance sheet total. The trade accounts receivable declined slightly as compared to 31 December 2009, and amounted to € 2.5 million. Fair Trade Original’s equity increased by € 0.3 million to € 3.5 million at year-end 2010.

2010 Key figures

sonnel

Depreciation

Sales

Accommodation

General

38,000

172,000

2,592,000

315,000

1,215,000

57,000

168,000

2,611,000

314,000

965,000

Personnel

Depreciation

Sales

Accommodation

General

2,738,000

172,000

2,592,000

315,000

1,215,000

2,757,000

168,000

2,611,000

314,000

965,000

2006

2007

2008

2009

Solvency (net equity as % of total capital)

5.5

17.7

39.3

45.4

45.6

Receivables turnover rate as % of net turnover 2009 Stock turnover rate as % of net turnover 2010 Return as % of average net equity

4.1

4.3

5.9

7.3

3.6

3.0

4.0

81.6

69.0

8.1

8.0

3.7 (131.3)

2010

The future Fair Trade Original expects that the result from the wholesale activities will be breakeven in the coming year. The majority of the subsidies will fall away, as a result of which the expenditure on the programmes for the trading partners will no longer be covered. Nevertheless, the organization has decided to continue these programmes in a downsized form. In this sense, 2011 can be regarded as a transitional year in which the operating result after taxation is forecast at a loss of approximately € 0.5 million.

increase of 5%. However, the margin declined from € 4.2 million in 2009 to € 4.0 million in 2010, a decrease of 4%. p

Sales turnover in million euros (excluding coffee) 2009

2010

Food retail

4.6

5.4

Gift retail

4.4

4.2

-5%

Out of Home

0.7

0.8

+ 19 %

0.6

0.5

- 26 %

10.3

10.9

+5%

International Total

+ 18 %

Food Food is of great importance to Fair Trade Original, since 84% of turnover is generated by food and coffee. In addition, these products are of great importance to brand awareness. There were a large number of developments in the product range and the various market channels in 2010. New products were introduced and the expansion of the range stocked by the supermarkets, Worldshops and other sales channels was a success. Sandwich filling portion packs for the Out of Home market were introduced in cooperation with Van Oordt the Portion Company. Fair Trade Original entered into a partnership with United Coffee (formerly Koffiebranderij en Theehandel Drie Mollen) for the processing of coffee for the Out of Home market. Following these developments consumers can now find Fair Trade Original ‘everywhere’. Development of turnover Total turnover generated by food and coffee increased from € 14.9 million in 2009 to € 15.6 million in 2010, an

Coffee turnover in million euros 2009

2010

Food retail

2.2

2.4

+9%

Gift retail

1.7

1.5

- 14 %

Out of Home

0.0

0.1

+3%

International

0.5

0.7

+ 25 %

Total

4.5

4.6

+2%

Fair Trade Original in The Netherlands

Pressure on Margins Raw material prices increased sharply in 2010: for example, the purchase price of Arabica coffee at the end of December was almost double the price at the beginning of the year. The purchase price of cocoa and fruit juice concentrates also increased. At the same time the prices fluctuated greatly. These developments posed great dilemmas for the trading partners: what do you do when the price unexpectedly increases sharply between the time your selling price is set and the farmers deliver the product? The farmers then demand the higher price - a price the cooperative cannot pass on. Moreover, these developments have resulted in sharp increases in the cost price of Fair Trade Original’s various foods - price increases that, to date, Fair Trade Original has been unable to pass on in proportional increases in the selling prices and which, consequently, have imposed great pressure on margins.

Food Retail The 2010 target for the supermarket channel stipulated a 9% increase in turnover (food and coffee), which was to be achieved by means of the introduction of new products, the expansion of the distribution of existing products and increased sales of existing products by the various supermarket organizations. Some chains have reduced the number of supermarkets that stock a number of products or have removed them from their shelves completely. Conversely, Emté was in the vanguard with the introduction of nine new products in its range, while Plus, Hoogvliet and Albert Heijn also introduced new products on their shelves. Jumbo, which offered some 50 products, once again marketed the broadest range of Fair Trade Original products in 2010. Turnover generated by food and coffee in the Food Retail channel exceeded the forecast for 2010. Gift Retail The 2010 target for Gift Retail (primarily the Worldshops and WAAR) stipulated a 4% increase in turnover generated by food and coffee. Sales of food at the Worldshops have been under pressure for years, and a number of Worldshops have closed their doors. Moreover some Worldshops give preference to more exclusive products on their shelves, whilst Fair Trade Original focuses primarily on the customary products. Sales of coffee in the Worldshops are also affected by the increasing competition. A variety of activities and products have been developed for this specific channel, such as the Origine coffee pods gift pack, Peppersweets and Herb mix.

Fair Trade Original in The Netherlands

Out of Home 14% of the turnover of food and coffee in 2010 was generated by orders relating to Christmas hampers. Turnover generated by food Christmas sales fell by 12%, due both to the loss of a number of large Christmas orders and the disappointing results recorded by the Worldshops. Food accounted for 87% of the Christmas turnover generated in 2010, slightly less than in the previous year. On balance, sales in the Out of Home channel increased from the previous year as a result of the inclusion of Fair Trade Original’s products in the range stocked by wholesalers and the cooperation with Van Oordt the Portion Company. International Fair Trade Original’s food sales in the International sales channel declined from the level recorded in 2009. Sales to international customers is not one of the organization’s spearheads, as is reflected in the decline. Our sister organization Fair Trade Original Belgium, which accounts for approximately one-third of the total turnover generated by food (excluding coffee) in the International channel, recorded 11% lower sales of food as compared to 2009. Turnover generated by coffee in the International channel increased by 25% due to the increased sales to Fair Trade Original Belgium.

The South African herb mixes were developed as a speciality for the Worldshop channel.

Promotion In 2010 Fair Trade Original, in cooperation with its customers, focused on discount offers and tasting sessions to promote sales of its products to a broader group of consumers. Recipe cards were used to promote repeat purchases, an approach which was successful at customers including Albert Heijn - Food Retail’s largest customer - that recorded increased regular sales. A continually increasing number of Super de Boer supermarkets were converted into Jumbo supermarkets in 2010. Fair Trade Original continued its investments in the Super de Boer supermarkets since these future Jumbo consumers will find fair trade products appealing. Jumbo provided an incentive to consumers to purchase Fair Trade Original products by the introduction of a Jumbo Deal for coffee and tea and advertisements for chocolate and rice in the Jumbo Magazine. p Many Plus supermarket retailers expanded their range of Fair Trade Original products in 2010, for which they received active support from Fair Trade Original. The C1000 supermarkets included a variety of new products in their range in 2010 and began a pilot trial at a number of supermarkets that now procure a broader range of products from Fair Trade Original. The Deen supermarkets introduced a number of special offers and organized tasting sessions with Fair Trade Original fruit juices during the Fair Trade Week. Marqt, a special shop formula offering authentic and natural products, opened a third branch, in Amsterdam, in 2010. Fair Trade Original’s products were an absolute hit in this environment. Marqt had a total of 45 Fair

Trade Original products in its range and the turnover generated by these products increased. A successful tasting session with chocolate bars was organized during the Fair Trade Week. Food sales were also actively promoted with special offers at the Worldshops and WAAR shops in 2010. The WAAR shops had vending machines where consumers could try a cup of coffee offered by Fair Trade Original. Consumer recipe cards were introduced at the Worldshops and WAAR shops in 2010. Ten recipe cards were offered in a Tien keer Heerlijk (‘Ten delicious recipes’) booklet. This booklet was ideally suited to inclusion in Christmas hampers: a total of 35,000 booklets were sold. A number of the Worldshops and the WAAR shops organized a coffee promotion in which consumers could win a pack of coffee, together with a culinary campaign in which consumers could win prizes including a cooking workshop provided by TV chef Ramon Beuk. Almost all Worldshops selling Christmas hampers made use of the Christmas hamper folder compiled in cooperation with Fair Trade Original’s colleague importer De Evenaar.

Fair Trade Original in The Netherlands

‘Real progress is being made’ The Jumbo supermarkets devoted additional attention to corporate social responsibility in the autumn of 2010. The Jumbo Magazine published articles including a report of the visit Pieter Kuizinga, a Jumbo entrepreneur in Groningen, paid to the Copiasuro honey cooperative in Guatemala. Jumbo presented the honey cooperative a gift of € 10,000 to mark Fair Trade Original’s fiftieth anniversary in 2009. This gift was allocated to the development of a training centre for bee-keepers and the purchase of a mobile honey separator. Pieter Kuizinga was able to see for himself how the gift has been allocated: ‘It was great to see that Fair Trade Original offers the underprivileged population resources that enable them to increase their standard of living. The families I met are clearly better off. The fair price they obtain for their product enables them to gradually improve their lives. Real progress is being made.’

Product liability Fair Trade Original is responsible for the quality and food safety of the products the organization places on the market. The supermarket chains, in particular, are imposing increasingly stringent requirements on quality and food safety - and consumers are also demanding food safety since consumers are not prepared to run risks with food. Fair Trade Original has implemented a Hazard Analysis and Critical Control Points (HACCP) system which has been granted certification by the Det Norske Veritas (DNV). The Dutch Food and Consumer Product Supervisory Authority supervises Dutch food chain by means of random inspections of companies in the chain. The Authority did not visit Fair Trade Original in 2010. An inspection of Fair Trade Originalâ&#x20AC;&#x2122;s HACCP procedure has been announced for May 2011. Some of the suppliers (trading partners in the developing countries and European companies which manufacture products such as chocolate and fruit juices using ingredients procured from trading partners) have been granted HACCP certification. Fair Trade Original accepts favourable assessments of the food safety systems of its suppliers when these are carried out by independent agencies approved by Fair Trade Original. 72% of all Fair Trade Originalâ&#x20AC;&#x2122;s suppliers had received certification for their food safety system by the end of 2010. Audits are scheduled at a number of suppliers in 2011 for an assessment of their food safety systems, as a result of which the number of certified suppliers is expected to increase to at least 80% in 2011. As new trading partners do not always comply with the stipulated requirements this issue is assigned priority in their development programme. p

Quality Fair Trade Originalâ&#x20AC;&#x2122;s HACCP system encompasses the continual monitoring of the quality performance of the products and suppliers. The work carried out by each link in the chain is governed by agreements and detailed product specifications that stipulate the requirements to be met by the relevant product. The supplier signs these specifications for approval and is subsequently responsible for compliance with them. Fair Trade Original issues all its suppliers an annual statement of their assessment which encompasses a number of quality issues. They are classified into one of three categories, namely green (good), yellow (minor non-compliances) and orange (major non-compliances). Explicit agreements on improvements are reached with suppliers classified into the yellow and orange categories. Supplier assessment 2010

2009

Green

77%

69%

Yellow

19%

26%

Orange

Complaints procedure Fair Trade Original keeps records of all complaints about food products received from customers and consumers, investigates the complaints and reports on the findings to the complainants. Consumers who are not satisfied with a product receive a replacement. The Quality officer carries out a quarterly analysis of the complaints and devotes specific attention to recurrent complaints. Fair Trade Original consults with the suppliers in an endeavour to identify the cause of the complaints and arrive at

Fair Trade Original in The Netherlands

Recalls The traceability of raw materials and finished products plays an important role in food safety. Every link in the chain must be able to respond to an emergency immediately and determine which raw materials have been used and which customers have received a specific product. Moreover, the availability of an adequate recall procedure is of great importance to the ability to withdraw products from the market. For example, a lot of jam was recalled in 2010 following the discovery of a shard of glass in a jar. An investigation carried out at the supplier revealed that there had been no incident involving glass during the production of the lot. There was no reason to presume that more jars could be contaminated and there were no further complaints. Fair Trade Original tests the traceability and recall procedures at least twice a year. The suppliers cooperate in these tests. The organization also increased its accessibility in 2010 by cooperating with a reporting centre, as a result of which crucial contact persons at the trading partners in other parts of the world can be contacted at any time of the day and night.

a structural solution. In 2010, 99.9% of the delivered order lines were delivered without complaints about the products. This has also been specified as the quality target for 2011. Complaints received in 2010: a total of 180 Packing non-compliances

39%*

Product appearance

27%

Flavour non-compliances

19%**

Other

15%

The spout of the chocolate sprinkles pack was modified in consultation with the supplier. The situation will be monitored to determine whether this has had the desired effect. ** Complaints about peanut butter with a high salt content resulted in an adjustment of the recipe. The Food Business Unit’s prospects 2010 was an extremely dynamic year for Fair Trade Original’s Food Business Unit. The changes to the organization resulted in a great deal of attention being devoted to internal issues and less - possibly less than had been expected - to external issues. The challenges confronting the Business Unit in 2011 are caused more by external dynamics. The developments in the global raw material market will continue to be one of the major issues requiring attention as there are no signs that the price increases will cease within the near future. 2011 will also be a challenging year due to the instability of the Ivory Coast (cocoa), further increases in the price of coffee, the excessive price of fruit juice concentrates, the fluctuations in exchange rates and the fierce competition in the Food Retail channel.

Fair Trade Original in The Netherlands

Gifts & Living Fair Trade Original’s non-food range is comprised of an up-to-date collection of gifts & living products. The main product categories are fashion accessories, interior decorations, tableware and, in the autumn, Christmas decorations. Every year some 500 new products are developed for and an equal number of products are withdrawn from the collection. At the end of 2010 the range was comprised of 1,600 article codes. Turnover generated in 2010 amounted to € 3 million, equivalent to 16% of Fair Trade Original’s total turnover. In 2010, the Gifts & Living Business Unit endeavoured to retain the current turnover generated by and the level of customer satisfaction at the Worldshops, WAAR shops and a number of foreign colleague fair trade organizations – traditionally Fair Trade Original’s most important customers - and achieve a substantial growth in sales in the mainstream channels. Fair Trade Original’s products offer the retail trade an opportunity to give shape to their corporate social responsibility. In 2010, Fair Trade Original accommodated this need by developing an increasing number of fair trade products made from ecologically responsible raw materials that have been granted ‘green’ certification. One result of these developments was the introduction of the new Fair & Green label.

Fair Trade Original launched a textile line and a leather collection on the market under its new Fair + Green label at the end of 2010. The cotton for the range of bath, bed and kitchen articles is cultivated by the farmers of India’s Chetna Organics cooperative, whilst the weaving, dying and stitching of the products takes place in responsible conditions at the Rajlaksmi factory in Kolkata. The products bear both the Max Havelaar Seal of Approval for fair-trade certified and the GOTS (Global Organic Textile Standard) Organic Cotton Seal of Approval.

The Business Units endeavours to increase turnover in 2010 were accompanied by work on the improvement of the net returns. In addition, the endeavours to achieve the budgeted growth were largely based on the utilization of the products and production capacity of the existing trading partners since growth is and will remain essential for their prospects. The Gifts & Living Business Unit also strived to achieve improvements in the areas of cost efficiency and risk control. The rationalization of the logistics activities resulted in a 21% reduction of the costs as compared to 2009, with total costs amounting to € 267,000. A shift took place from sales from stock to sales on order and special requests, thereby reducing the stock risks. The stringent policy governing run-down sales, mark downs and lot sales pursued in 2010 resulted in the reduction of the provision for unmarketable stock from € 381,000 at the end of 2009 to € 312,000 at the end 2010. The 2011 target stipulates a further reduction of this provision to € 250,000. Cash & Carry 40% of the sales of gifts & living products are made from the Cash & Carry shop in Culemborg. The remainder of the sales are delivered by the logistics service provider. The Worldshops procure 80% of their stock at the Cash & Carry: they prefer to make their choice on the spot and to see the products. The display of the product range at the Cash & Carry is supplemented with examples of displays that can serve as inspiration for retailers.

Fair Trade Original in The Netherlands

Development of turnover Turnover generated by gifts & living products exhibited a modest 3% increase in 2010 as compared to 2009, to an amount of € 3 million. Consequently, the ambitious € 3.5 million turnover target was not achieved. Turnover generated by the mainstream Gift Retail customers fell short of budget, at € 565,000 rather than € 750,000. During this same period the gross margin increased from 35% to 41%, in part due to the favourable development in the exchange rate of the US Dollar. Gifts & living turnover, million euros 2010

2009

Gift retail

2.4

2.5

-3%

International

0.5

0.4

+ 19 %

Out of Home

0.1

0.0

+ 140 %

Total

3.0

2.9

+3%

Gift Retail The Netherlands’ 355 Worldshops were once again the most important group of customers in the Gift Retail channel in 2010. FaiRSupport assists the Worldshops and WAAR shops in their sales activities. The National Association of Worldshops has approved 28 importers of fair trade products for sales to the Worldshops: Fair Trade Original is the largest party in this field. On average, Fair Trade Original’s share of products in the Worldshops’ gifts & living range was 34% in 2010. Fair Trade Original took active part with its products in the four consumer folders FaiRSupport published in 2010. Sales to the Worldshops declined, in part due to the poor weather during the last three weeks of 2010. This resulted in a substantial decline in the number of visits

Fair Trade Original began work on the production of ecologically-responsible leather in 2009. To this end fundamental steps were taken throughout the chain – in cooperation with experts, the Craft Resource Center trading partner and a tannery in Kolkata – to spare People and Planet (more information is given on page 46). This leather was used to make a collection of rugged bags and purses in 2010.

to the Cash & Carry. The Worldshops’ sales also suffered from the poor weather. The increasing interest in online sales resulted in Fair Trade Original approaching Wehkamp.nl to review the feasibility of cooperation as the Fair Trade Original brand is highly compatible with the vision, ambitions and brand portfolio of Wehkamp’s interior decoration segment. Some 45 articles were included on the Wehkamp.nl website in December 2010, and new articles will be added in the spring of 2011. Many smaller web shops have also found their way to Fair Trade Original’s products. Products were also developed for the Hema department stores’ Return to Sender label in 2010: the number of products grew and the order volume per article increased. These products are made exclusively for Hema. International Fair Trade Original in Belgium, distributor of fair trade products to the Flemish Worldshops, is the international channel’s largest customer. Fair Trade Original’s participation in the Ambiente Trade fair resulted in the addition of a number of new international customers to the organization’s client portfolio. A number of European colleague organizations also ordered gifts & living products from Fair Trade Original, including the Danish Fair Trading Company and Swedish House of Fair Trade. The turnover generated by this channel increased. Fair Trade Original took part in Ambiente, the major Giving and Living in Frankfurt Trade Fair, for the first time in

February 2010. This international trade fair also attracts many professional procurement officers from the Netherlands. This first participation received an enthusiastic welcome. The Ambiente organizers awarded the Piet Hein Eek collection a place of honour on the Galleria trends square, as a result of which many new customers found their way to Fair Trade Original’s stand. This successful first participation resulted in Fair Trade Original being assigned an even more favourable location for its stand at the beginning of 2011. Out of Home In 2010, Fair Trade Original’s activities in the Out of Home market once again included cooperation with the Fair Goods & Food Company, an organization which focuses exclusively on the Christmas hamper (wholesale) trade, in the in 2010. An increase in turnover was recorded. Gifts & Food A number of shops in the Food Retail channel supplement their Fair Trade Original food products with gifts & living products: Groningen’s Jumbo Beren is a highly successful example of these customers. Buddha statuettes stood amicably alongside the jars of peanut butter at the 2010 fair trade square - a combination which was appreciated by the customers, as was demonstrated by the turnover generated during the event.

Fair Trade Original in The Netherlands

Collection by Edelman The strength of the Fair Trade Original brand and the increasing brand awareness offered new opportunities for the gifts & living products. A number of major market players approached Fair Trade Original with proposals for cooperation. Edelman, a major importer/exporter of interior decorations and Christmas products focusing on sectors including the garden sector, developed an in-house collection at Fair Trade Original’s producers which the organization markets under the Fair Trade Original. Collection by Edelman label. The collection was introduced to the retail trade in December 2010. The results will become visible in 2011. Edelman has indicated that it wishes to continue the cooperation with Fair Trade Original for a longer period of time. The next collection will be introduced in the spring of 2011.

Compilation of the collection and promotion Fair Trade Original’s gifts & living collections are compiled on the basis of the knowledge of market trends, visits to trade fairs, trend meetings and the knowledge of the target group. The product development work is carried out by in-house designers supplemented with freelancers, in particular for the development of fashionsensitive products such as jewellery, bags and scarves. The designers are expected to be able to anticipate the future since the average period between the design of a product and its launch on the market is about eighteen months. The design takes account of the feasibilities of the producers, who are simultaneously confronted with the challenges of developing new skills and using different colours, techniques and forms. The new gifts & living collections were presented in February and August, when 200 and 325 new products respectively were introduced. Four collection handbooks, intended for retailers, offered an insight into the products and producers. For this reason copies of the collection handbooks were also distributed to the lifestyle press, which regularly included products on the shopping pages. This effect was further enhanced by the visibility of the collections on the website. Product liability Fair Trade Original’s gifts & living products are characterized by the great variety in types of product and materials used to make the products. Each material must meet specific individual requirements - statutory requirements governing the EU member states, requirements imposed by market players relating to the sustainability, functionality and safety, and administrative requirements relating to imports, tax, customs and other documents.

In 2010, Fair Trade Original revised the Manual Market Access Requirements for Handicrafts in cooperation with the CREM consultancy, Amsterdam, to ensure that the organization’s staff and producers remain up to date with the requirements imposed on the materials and products. The Manual, which reviews all the aforementioned materials and requirements by product group, is distributed to Fair Trade Original’s trading partners. The products must comply with functional requirements including the customary requirements for suitability for use in microwave ovens and dishwashers or washing instructions for textiles. All the requirements imposed on the products are also specified in the order instructions. Quality The producer submits a sample of products prior to their selection for sales. The sample is then inspected to verify compliance with the relevant requirements, usually by the organization’s staff and based on a quality checklist. Some samples, such as glass and ceramic products that need to be inspected for food safety, are submitted to a SGS (Societié Générale de Surveillance) laboratory with a request for a report on the products’ compliance with the relevant requirements. The dyes used in scarves and other textile products that may come into contact with the skin are also examined for the presence of chemical constituents. Guarantees are required that these dyes are free of AZO compounds (constituents of pigments containing nitrogen groups). The producers bear the responsibility for ensuring that their products comply with the relevant statutory requirements, although a number of products are also tested in the Netherlands as a double check.

Fair Trade Original in The Netherlands

The cooperation with Piet Hein Eek that began in 2009 bore fruit in 2010. The collection of wooden baskets was launched on the market in May and the hand-painted vases in September. In addition to the large volume of free publicity generated by the collections they also achieved excellent sales at both the Worldshops and at new customers. New customers such as De Bijenkorf and Wehkamp included the products in their range and foreign chains such as The Conran Shop (UK) bought consignments. This success resulted in the substantial growth of the relevant trading partner in Vietnam. The Fair Trade Original by Piet Hein Eek collection was supplemented with FAT crockery from Thailand in 2011.

Quality at the producers In some instances smaller producers have difficulty with complying with a statutory requirement: for example, they are unable to procure cotton dyes in all the required colours which are guaranteed AZO free. It is then necessary to search for other colours or for another solution. Fair Trade Original’s business consultant gives the producers intensive support in complying with the requirements imposed on their products. In some cases this support is comprised of a consultancy programme for a specific trading partner in which the local feasibilities are examined, while in other cases the support can be provided in the form of a workshop attended by a number of producer groups. Examples of these workshops include the packaging workshops and quality workshops organized by the business consultant at regular intervals. In specific instances experts assist the producers in the implementation of improvements to the technical elements of the production processes. Two experts with many years’ experience of the leather goods sector are, following their retirement, engaged in work on quality improvements: a specialist from the PUM Dutch Senior Experts organization is engaged in similar work for the jewellery segment. Complaints procedure Quality is an issue which receives attention from product development right through to the ultimate assessment of products, an approach which avoids many - but not all - problems with the products after their sale to consumers. In some instances the producer’s sample complies with the stipulated requirements but the functionality of the products is subsequently found to be less than desirable. Customer complaints are subjected to an

Fair Trade Original in The Netherlands

assessment to review whether a structural problem or an incident is an issue. A structural problem results in the recall of the entire lot, whilst an incident is followed by an exchange of the product. The Gifts & Living Business Unit’s prospects The growth recorded in the past year has brought the declining trend in turnover of the past years to a halt. However, and in spite of all the efforts that were made, the ambitious growth target was not achieved. This demonstrates that Fair Trade Original operates in a market in which it is difficult to benefit from the apparent opportunities offered by the market. A review will be carried out in 2011 to assess whether the required turnaround can be achieved in the future and, if so, which conditions will need to be met. Nevertheless, the customer portfolio in new sales channels that are to be developed has increased and the shift in the range towards a number of powerful product lines became visible at the end of 2010. These developments lay the foundations for the work to be carried out in 2011, when the activities will focus on further growth in new markets and the expansion of the business relationships with existing customer groups. New projects with well-known Dutch designers are in the pipeline which will once again demonstrate the great appeal of the Fair Trade Original brand. The recently-introduced Fair + Green label can also prove itself in 2011 in both existing and new sales channels. Other opportunities are offered by the development of new product/market combinations in response to requests from third parties to cooperate with Fair Trade Original under the umbrella of the organization’s strong brand.

Fair Trade Original advises its trade partners during their search for dyes that are guaranteed AZO free for the production of scarves and other cotton products.

Marketing Almost 48.5% of all Dutch households bought one or more fair trade food products in 2010: almost 500,000 consumers bought their first fair trade food product during the course of the year. These figures are from a representative survey carried out by NCDO in cooperation with the Max Havelaar Foundation and Fair Trade Original. This growth is largely due to the broader product range and increased attention for fair trade. The survey revealed that Dutch households increasingly buy their fair trade products at supermarkets. Most fair trade buyers make their purchases on the basis of their ideals. The quality of the products is a second important reason. The most important reason for not buying fair trade products is unawareness. Other consumers are of the opinion that fair trade products are too expensive. The range of fair trade products available on the market is increasing and the number of fair trade brands entering the market continues to grow. Fair Trade Original intends to respond to this competition by positioning itself as the A-brand with a broad product range, innovative products and the unique underlying concept of trade that develops. Product introductions In the summer of 2010, Fair Trade Original expanded its culinary range with Peppersweets, sweet spicy peppers cultivated exclusively in South Africa. Another new South African product is the Herb mix, available in Sweet Pepper & Pepper and Garden Herbs & Mustard flavours. The Honey biscuit, Choco Crispies, Geobar, Cape Mustard

Fair Trade Original in The Netherlands

Honey, Tropical Honey 900 g, products and two Argentinean wines from La Riojana were discontinued. Following a number of modifications made in 2010, Fair Trade Originalâ&#x20AC;&#x2122;s extensive range of coffees is now tailored even more closely to the customary products available on the coffee market. Consumers can now opt for a 500g pack of Aroma coffee (alongside the 250 grams pack), the weight of the Espresso coffee beans pack was increased from 250 grams to 500 grams, the Regular, Dark Roast and Mild bio coffee pads are now available in 36-pod packs instead of the former 18-pod packs and a number of minor flavour adjustments were implemented. A continually increasing number of consumers opt for coffee beans from a specific origin rather than blends, as a single type of bean does most justice to the characteristic flavour of the coffee from the specific region. In 2010, Fair Trade Original introduced a gift pack with coffee pods containing coffee from Guatemala, Ethiopia and the Kilimanjaro region. As from September 2010, Van Oordt the Portion Company offers Fair Trade Originalâ&#x20AC;&#x2122;s sandwich fillings to the Dutch food service market in portion packs. Fair Trade Original and Van Oordt took this step to meet the increasing demand for fair trade products in this market segment. The first products to be launched on the market in portion packs were two types of jam, peanut butter, milk and plain chocolate vermicelli, hazelnut paste and honey. A range of portion packs to accompany a cup of coffee are under development. This range includes sugar, biscuits and chocolates. The portion packs are on sale at wholesalers and are sold to consumers at outlets including company restaurants, hotels and institutions.

Fair Trade Original put its range of wines firmly on the map with four new fair trade wines, of which two are organic.

Fair Trade Original introduced four new South African wines in mid-November 2010, two of which have been granted organic certification. The range is comprised of Cabernet Sauvignon, Merlot, organic Merlot and organic Sauvignon Blanc. The attention of the various target groups was drawn to the food and gifts & living product introductions by means including the website, Newsletters, F-Commerce and shop promotions. Fair Trade Original receives recognition Fair Trade Original received the Innova Klassiek Award for its Tropical Juice in 2010, an award the Levensmiddelenkrant food journal grants to products that are still a success on the shelves four years after their introduction. A number of Fair Trade Original’s wines were mentioned in the Wijnalmanak 2010, Superwijngids and Grote Hamersma wine books. Fair Trade Original’s organic Sauvignon Blanc, from South Africa, won the Sterwijn and Omfietswijn awards. In addition, a professional jury proclaimed Fair Trade Original’s Chardonnay, also from South Africa, best fair trade white wine of 2011. Campaigns Fair Trade Original selected a new advertising agency in the spring of 2010. The agency will give shape to the consumer campaigns that will take place in the coming years. The Selmore advertising agency, with clients including Bavaria beer and the De Bijenkorf department store, was awarded the contract on the basis of the agency’s expertise in the strategic and creative fields.

Fair Trade Original in The Netherlands

Selmore’s first work for Fair Trade Original was the WEEK NA (‘Week after’) campaign which was held immediately after the Football World Cup that took place in South Africa in July. The campaigns message was: everyone is leaving South Africa, but Fair Trade Original is staying to work on fair trade. Fair Trade Original’s first ever TV commercial called on consumers to order the WEEK NA package containing six South African products. In April 2011 we learnt that the WEEK NA campaign had been nominated for the ADCN Annual Advertising and Design Awards, one of the most important advertising creativity awards. The WEEK NA campaign was nominated in the campaign marketing category. Fair Trade Original began a campaign in the autumn of 2010 which was based on a new communication concept and a new media strategy. The organization opted for an approach in which the brand is to be seen on TV regularly throughout the year. The TV commercials are broadcast on Thursdays and Fridays, the days on which the lists for the weekend shopping are made. The campaigns title is Products with a special story. Brand survey Following the 2006 and 2008 surveys, Fair Trade Original conducted a new brand survey in 2010 which reviewed brand awareness and other issues including brand attitude, product awareness, point of sale and use and purchasing frequency. Fair Trade Original’s target stipulated brand awareness of 50% at the end of 2010. The brand survey revealed that this target had been achieved by an ample margin: prompted brand awareness was 70% and spontaneous

Every commercial in the Products with a special story campaign presents a product or product range - and always with an alien element. The dialogue on the background explains that this element symbolises the special story behind the product. The first commercial – broadcast in November - focused on Fair Trade Original’s breakfast products. The plug shown with the product referred to the Malawian sugar farmers’ ability to install electricity supplies to their village due to their increased income from their product.

brand awareness was 52%. However, it should be noted that although respondents stating Fair Trade may mean Fair Trade Original, this cannot be concluded with certainty in view of the generic brand name and the increasing familiarity with the fair trade concept. Fair Trade Original’s brand awareness 100

60 46

40 20

Spontaneous brand awareness Prompted brand awareness

7 2008

2006

2010

Brand awareness in %

Corporate communications Fair Trade Original has adopted an individual approach based on the fair trade principles and the organization’s more than five decades of practical experience. This approach and the choices made in everyday practice are reviewed in the Principles and Method publication issued in 2010, together with a general corporate brochure. Two issues of the F-Commerce magazine were also distributed amongst customers and business relations in 2010. The readers were asked to state their opinion of F-Commerce in a survey held in the summer. The responses revealed that most respondents were extremely satisfied with the varied content, the style of writing and the general presentation.

Marketing in the future During the coming years Fair Trade Original, in investing in the development of new fair trade products, will continue to give substance to its leading position as an A-brand offering a broad and varied fair trade product range. The increasing interest in fair trade products in the Out of Home channel will result in a greater emphasis being placed on the development of food products and packaging concepts for this market segment in the coming time. The Fair Trade Original brand will acquire a continually more prominent position in the market, both due to the expansion of the product range and distribution of the products, as well as to the organization’s campaigns and promotional activities. The strength of the brand will increase its appeal to third parties for the development of new product-market combinations under a Fair Trade Original brand licence. However, this will require a firm brand policy and direction as it is essential that consumers buying all products marketed under our label can continue to rely on the brand’s fundament: trade that develops. The introduction of the new website is only the first step in the implementation of Fair Trade Original’s strategy of making increasing use of the opportunities offered by the web for the achievement of the organization’s objectives. In view of the above, a web manager will be recruited in 2011 to give shape to Fair Trade Original’s online marketing and sales strategy.

Fair Trade Original in The Netherlands

Nationale Postcode Loterij The Nationale Postcode Loterij announced in 2010 that it will support three fair trade organizations - the Max Havelaar Foundation, the National Association of Worldshops and Fair Trade Original - in their endeavours to achieve the breakthrough of fair trade products in the Netherlands. The Nationale Postcode Loterij allocates part of the lottery proceeds to the support of charitable institutions that endeavour to arrive at a just and green world. Within this context the three organizations jointly organized a Fair Trade Week in the period from 21 to 30 October inclusive which was based on the Fair Exchange theme. The Fair Trade Week 2010 was a success: the results achieved with this year’s campaign week were doubled sales of fair trade products in the supermarkets, 160 restaurants with fair trade menus, thirteen official Fair Trade municipalities in the Netherlands, 540,000 primary schoolchildren who became acquainted with fair trade products and the story behind the products, fair trade activities at more than 3000 company locations and Fair Requests from students at universities of applied sciences and universities. More than 10,000 Dutch consumers registered their fair trade purchases on a special campaign website.

Fair Trade Original in The Netherlands

Attention to environmental issues Attention to the environment is compatible with and an integral element of Fair Trade Original’s objective. Fair Trade Original focuses its environmental protection activities on the limitation of the environmental impact of various links in the chain, namely during the production in developing countries, during transport and within the Fair Trade Original organization. Fair Trade Original is convinced that environmental protection offers its trading partners opportunities to enhance their position and improve the market value of their products.

Gas consumption The premises Fair Trade Original currently lets for its offices, stores and shop are not insulated optimally and are equipped with obsolescent heating.

Fair Trade Original promotes environmentally-minded actions on the part of all its staff and business divisions. The organization focuses on the use of paper (printed matter, company stationery), the consumption of gas and electricity and the use of the vehicle fleet.

Electricity consumption Fair Trade Original consumed 147,527 kWh in 2010, an increase of 0.65 % as compared to the previous year. Fair Trade Original began to source Nuon’s Natuurstroom (‘green electricity’) in 1999. All this electricity is generated using the sun, wind and water. In opting for Natuurstroom Fair Trade Original avoids emissions equivalent to 99 tonnes of CO2. Alongside the aforementioned consumption of electricity criterion for potential new accommodation, the consumption of gas will also be a criterion governing the selection of the organization’s new offices and shop.

Paper consumption Fair Trade Original uses paper and company stationery bearing the Forest Stewardship Council (FSC) Mixed Sources seal of approval. Double-sided printing is adopted whenever possible. Fair Trade Original procured 1940 kg of paper (blank paper, stationery, invoice forms) in 2010, equivalent to 47.3 kg paper per FTE. An annual inventory will be carried out to determine whether the organization’s consumption of paper has been reduced. The first inventory was carried out on 1 February 2011. Fair Trade Original shall develop policy from 2011 for the achievement of a structural reduction of the organization’s consumption of paper. This will include a study of the feasibility of submitting all invoices by e-mail in the future.

There were two cold months in 2010, namely February and December. The current lease expires at the end of 2012. The energy consumption and insulation value of potential premises will serve as important criteria in the selection of new accommodation.

Vehicle fleet, business trips and transport Fair Trade Original’s logistics services are provided by Van Uden Logistics. This company received a Lean and Green Award in 2010 within the context of Connekt’s Sustainable logistics programme. Van Uden Logistics has implemented a combined package of measures which is intended to achieve a 22% reduction of CO2 emissions in 2012 as compared to the benchmark year of 2007.

Gas consumption in m3 * 2007

2008

2009

2010

53,400

48,400

39,900

47,200

Electricity consumption in kWh * 2007

2008

2009

2010

250,500**

158,000

146,600

147,500

* Fair Trade Original’s offices and stores at Beesdseweg 5 **All logistics services were outsourced in the autumn of 2007, as a result of which electric fork-lift trucks and stackers are no longer used and there is no warehouse that needs to be cooled in the summer. This has resulted in a substantial reduction of the location’s consumption of electricity.

Fair Trade Original leased four cars in 2010. The environmental performance of the cars was examined at the time of their purchase. The cars have been assigned an A, B or C environmental label or are fitted with an LPG tank so that the cars can be run on LPG. The four leased cars covered a distance of 123,717 km in 2010. Fair Trade Originalâ&#x20AC;&#x2122;s business consultants pay regular visits to trading partners and producers in Latin America, Africa and Southeast Asia. In 2010, Fair Trade Original staff and consultants contracted by the organization flew intercontinental flights covering a distance of 942,083 km (equivalent to emissions of 213.75 tonnes of CO2), a decrease of 34.4% as compared to 2009. Intercontinental air kilometres flown by Fair Trade Original staff and consultants 2009

2010

1,435,700

940,000

tonnes CO 2

322

213

Flights within Europe are not taken into account in the above figures as these are not booked from a central location and, consequently, are not registered. The staff are requested to travel on journeys of less than 500 kilometres by train and otherwise by car. Packaging Fair Trade Original pays packaging tax on all packaging materials brought on the Dutch market. Records are kept of the use and type of packaging for each article. Product development includes a review of decreasing the weight of the packaging without detriment to the risk

Fair Trade Original in The Netherlands

Material use, rounded off to the nearest kg and in kg 2008

2009

Paper and cardboard

127,000 100

130,000 102

137,500

108

Plastic

24,000

27,000

113

27,500

115

Glass

234,500 100

247,000

105

245,500 105

Metal (other than aluminium)

9,000

100

16,000

178

23,000

Aluminium

400

100

250

350

Wood

1,500

100

1,500

100

1,300

Movement in Fair Trade Originalâ&#x20AC;&#x2122;s turnover

100

116

2010

256

122

Index 2008 = 100

of breakage and the quality of the product. In 2010, this resulted in measures including the use of wine bottles with a lower weight, a measure which will be implemented in 2011. The switch from wine bottles weighing 550 g to bottles of 450 g, and later, to 350 g is estimated to ultimately result in a more than 65,000 kg reduction of glass waste. The quantity of metal used in packaging increased sharply in 2009 and 2010 following the introduction of canned coconut milk and pineapple. In the future, Fair Trade Original intends to adopt a more structural approach to reviews of the quantity of packaging used for its products with the objective of ensuring that consumers need to dispose of continually less packaging with an environmental impact. In 2011, a trainee began work on an inventory of the feasibility of the reduction of the use of packaging. Records of the packaging tax can be of assistance in quantifying the effects of this policy in the coming years.

Environmental policy in the chain Fair Trade Original does not intend to restrict the measures that the organization implements to those required to comply with the statutory requirements. The organization endeavours to achieve continual improvements in its environmental performance and to reduce the environmental impact of all links in the chain. However, the organization is not in a position to develop a product-oriented environmental assurance system for all products or product groups. Nevertheless, Fair Trade Original does strive to supplement each product group in the range it markets with an organic variant bearing the EKO Seal of Approval. In addition, product specialists working on the designs of new products also review the associated environmental issues, issues including the choice of dyes, the choice of packaging materials and the use of raw materials granted ecological certification. In 2010, the Gifts & Living Business Unit developed a Fair & Green line comprised of textile leather goods that appeared on the shelves at the end of the year.

Fair Trade Original in The Netherlands

Working at Fair Trade Original Fair Trade Original’s human resources policy is focused on the promotion of the motivation of its staff and on results-oriented working methods with the ultimate objective of ensuring that the staff are willing to take initiatives, appreciate professionalism and are prepared to be called to account for their performance. p

table and a new salary table. An agreement in principle was concluded at the end of 2010. The Works Council consulted with the staff on the various regulations at the beginning of 2011, after which the regulations were signed by the Management Board and the Works Council.

The organization’s low absenteeism rate and staff turnover rate are related to the staff’s current high degree of motivation. The staff’s results-orientation has developed during recent years due to the agreements reached with staff during their job appraisal interviews on the results they are to achieve in the coming period and to the evaluations of these results at the end of the year. The recruitment of new staff in the past couple of years has resulted in more staff originating from commercial companies joining Fair Trade Original. Their knowledge and experience is of great value to the organization’s activities in the retail channels. Staff are offered an opportunity to follow courses that increase their professional knowledge and/or personal effectiveness.

The progress and job appraisal interview system that was introduced in 2008/2009 was embedded further in the organization in 2010. The progress interviews are held before 1 July of each year. As from 2011, the job appraisal interviews will be held in December of each year since, pursuant to the new salary system, these appraisals can have consequences for the periodic salary increases.

HR policy instruments Following the start of the negotiations in 2009 negotiations continued with the Works Council in 2010 on a revision of the legal status regulations and the salary system together with the introduction of a new job classification system within Fair Trade Original. The legal status regulations are in part based on the hospital collective labour agreement and are in part tailored to Fair Trade Original. The salaries and year-end bonuses shall be indexed on the basis of the adjustments specified in the hospital collective labour agreement. All jobs at Fair Trade Original have been reclassified in a new job grade

A new personnel information system supplied by ADP (Automatic Data Processing) was introduced in 2010. A digital leave system is linked to this user-friendly information system. The HR Consultant shall receive further training in the use of a reporting and analysis tool for the generation of management information. Jobs In 2010, a thorough study of the current and future duties of the Reception and Sales Office resulted in the decision to reorganize these departments. The Reception department, until then a separate department, was abolished and the remaining reception duties were integrated in the duties of the Sales Office. Unfortunately, this resulted in the redundancy of two members of the Reception department and one member of the Sales Office. These staff were offered an opportunity to participate in an external outplacement programme to help

Fair Trade Original in the organization The involvement of the staff in the organization’s policy and activities is promoted by means including holding Fair Trade Original in operation meetings. These meetings are held to update the staff on developments in the organization, news about the trading partners and the trade, etc.

them find work elsewhere. The organization also said farewell to two members of the Finance, ICT and Programme Management department, one of whom left the organization on reaching retirement age. Age structure At 31 December 2010, the average age of the men was 46 and of the women 43. The average age of the men remained unchanged from the previous year, whilst the average age of the women decreased by two years. Staff turnover rate At 31 December 2010, almost half of the staff had been in employment with Fair Trade Original for more than 10 years. Some of these members of staff were older than 50. For this reason an inventory was made within the scope of strategic HR management in 2010 to assess the situation in three to five years’ time. This then gives rise to the question as to the required approach to knowledge transfer: staff employed by Fair Trade Original for a longer period of time, in particular, possess a great deal of knowledge about the organization and its environment. The strategic HR management policy shall be worked out in more detail in 2011. Fair Trade Original offered four traineeship places in 2010: a preparatory secondary vocational education trainee carried out a practical traineeship in the Cash & Carry section, a higher vocational education trainee studying Commercial Economy carried out market research of the Food Business Unit’s Out of Home channel, a higher vocational education trainee studying Communication carried out a study of the packaging texts, and a university trainee studying Management Science

carried out studies at Tanzanian coffee organizations for the Programme Management department.

Fair Trade Original in The Netherlands

Jobs at 31 December 2010 2010

2009

Pension fund Fair Trade Original is affiliated with the Zorg en Welzijn pension fund.

Women/men

31/17

36/16

Indefinite period/Definite period

46/2

48/4

Fulltime/part-time

26/22

30/22

Total number of staff

Health and safety Fair Trade Original works with the Rienks Arbodienst occupational health, safety and welfare service. The medical officer holds consultancies at the offices as required. As a result of the low absenteeism rate in 2010 the medical officer’s visits to Fair Trade Original were not very frequent during the year under review. However periodic consultations were held between the HR consultant and the medical officer. The occupational health, safety and welfare service has assigned a confidant to the organization. The confidant’s services were not required in 2010. In 2010, all staff were offered an opportunity to undergo a voluntary periodic medical examination organized by Rienks Arbodienst. 33 of the 46 members of staff made use of this opportunity. A repeat examination is scheduled in two years’ time.

Total number of FTEs

The absenteeism rate was 2.5% in 2010 (2009: 4%). A total of 413 working days were lost in 2010. The relatively low absenteeism rate (national average in 2010: 4.4 %) was due to the virtually complete long-term absenteeism due to illness and to the efforts to maintain good contacts with staff on sick leave to ensure that the threshold confronting them on their return to work was minimised. In some instances the organization was able to avoid a member of staff reporting sick by responding adequately to the signals they were giving

Age structure at 31 December 2010 Age category

Departing staff

35+

New staff 1

40+

50+

55+

Years’ service at 31 December 2010 Number of years

Number of staff

5-10

10-15

>15

and seeking a solution for, for example, their working conditions, or by offering staff with a problem in their private life scope to deal with the problem. This approach shall be continued in the future. Training courses € 25,000 was allocated to training courses in 2010. This budget was allocated to financing a wide range of training courses, namely creative negotiations, food contact materials, commercial office department, assertiveness, financial management for non-financial managers, colour specialist, an upper secondary vocational education level course in facilities management, strategic communications, social media, tax affairs for non-tax specialists and professional consultancy skills. Ten members of staff took part in an in-house time management course. Staff who still encountered problems with the management of their work after the course were coached by the HR consultant. Works Council Fair Trade Original has a Works Council with four members. Elections were held in April 2010 for two seats on the expiry of the two members’ term of office, after which the Works Council, with a slightly different membership, enthusiastically resumed its duties. The Works Council was requested to give an opinion on a modification of the organization (Reception/Sales Office) that would result in three redundancies. The Works Council gave a favourable opinion in view of the reduced amount of work for the department, subject to the condition that appropriate and suitable arrangements would be made for the members of staff involved.

Fair Trade Original in The Netherlands

Other important issues discussed in 2010 were: • the financial results • the rejection of the application for an MFS II subsidy and the consequences for the financing of the study programmes • The Gifts & Living Business Unit: a study of the profitability and the best possible organizational form. The Works Council, with the assistance of the ABVA/ KABO trade union, also held negotiations on the new legal status regulations for Fair Trade Original’s staff, including the development of a new job ranking system and new salary structure. The revised regulations were adopted and implemented at the beginning of 2011. The future The feasibility of a Staff-satisfaction survey and a plan of approach for strategic HR management are being reviewed with the objective of improving the organization’s HR policy even further in the future. Fair Trade Original has a number of staff who frequently travel for the performance of their duties. The organization’s travel policy will be updated in 2011. A begin will be made with consultations in 2011, for the time being to take place on two occasions, which will be attended by all managers and the HR consultant, and shall pivot on joint discussions of the day-to-day management of the staff or specific issues that play a role within the organization.

On the completion of the social media training the first steps were taken on media including Twitter.

Fair Trade Original in The Netherlands

Hoofdstuktitel

Fair Trade Original at the trading partners

The search for ecologically responsible leather Development trade in practice

Tanner in India. Fair Trade Original’s Fair + Green leather is better for People and Planet.

The leather industry is an important employer in India and leather goods are popular on the European market. However, the Indian leather industry is notorious for the damage it causes to people and the environment. The tanneries make the hides supple using heavy metals and chemicals. Obviously, this is detrimental to the surroundings - both to the employees who have to use these compounds and to the environment, which is polluted with the residues. This gave cause for Fair Trade Original’s decision to seek partners prepared to invest in the development of ecologically responsible leather. Fair Trade Original and Hans Both, a Dutch leather expert, began an in-depth study of every facet of leather production and of the experiences others have acquired with environmentallyfriendly processing. The most important questions to be answered were ‘What do we understand by ‘ecologically responsible leather’? Is there a standard?’ and, when it transpired that there was no stan-

dard, ‘How can we draw up a standard and how can we implement it?’ Fair Trade Original’s CRC trading partner in India joined in the search for tanneries wishing to participate in the product. In addition, consultations were held with the workshop that would make the ultimate products, bags and purses. Patrick Lee, owner of the Sheong Shi tannery in Kolkata, saw opportunities offered by a new approach: ‘Things were difficult in the beginning. All the chemicals and metals I used were necessary to make leather of good quality and with the required properties. I carried out experiments and, slowly but surely, found suitable alternatives. I can now tan leather without using the most harmful compounds, such as cadmium, nickel and cobalt. What I’m doing may well be pioneering at the moment, but it will probably become common practice in the future. It’s just a question of time.’ Hans Both is also satisfied with the result, which was followed by

the delivery of the first series of bags and purses at the end of 2010: ‘This is currently the nearest we can get to the environmentally-friendly production of leather in India. In addition to reviewing the use of harmful compounds we also examined the energy load, water treatment, working conditions, safety and transport. We now use hides from West Bengali cows rather than from Argentina, the customary source. We continued by making an inventory of the most harmful compounds used throughout the process and gave instructions for their replacement by other compounds. We have developed a number of stringent in-house standards which we have implemented on top of the existing European standards. We have also made adjustments to one of the last steps in the process, the use of dyes in the finishing stages of the process. As a result, Fair Trade Original is in the vanguard. We have created a marvellous series: the products are rugged and radiate fairness.’

Fair Trade Original at the trading partners

Access to the export market Fair Trade Original’s development trade concept offers its trading partners in Africa, Asia and Latin America access to the export market and enables them to make use of opportunities beneficial to the success of their organization and their position in the international market. This approach creates jobs, increases the producers’ income, enhances their position and improves their control of their working and living conditions. Development trade entails trade governed by fair trade conditions with trading partners who comply with the fair trade principles or make every endeavour to implement them. Development trade also entails the provision of support to organizations in their efforts to comply with the requirements imposed by the fair trade market. Fair Trade Original distinguishes itself with its approach to trading partners, an approach which makes a structural link between trade and development. Fair Trade Original maintains regular contacts with its trading partners, which involve consultations with the product specialists, buyers and logistics staff on issues such as product development, samples, quality, orders and shipments. The business consultants, trading partners and other parties involved jointly review improvements to links in the chain that need to be made to enable the trading partners to become strong players in the export market and ensure that the producers and their employees at the beginning of the chain also benefit. This results in development programmes and business plans in which Fair Trade Original plays a facilitating, advisory and, on occasion, hands-on management role. Fair Trade Original also works closely with local consultants in most of the countries where the organization has trading part-

ners. Fair Trade Original requests the local consultants to guide the trading partners and producers in their implementation of plans of action, development of business plans and financing, etc. Fair Trade Original reviewed and tightened its trading partner policy in 2010. The results of this review are explained in the organization’s Principles and Method publication. Fair Trade Original makes use of the Max Havelaar Seal of Approval whenever possible to serve as a guarantee for its producers’ fair trade claims. Trading partners and producers making products not covered by this seal of approval are audited using the EFTA fair trade assessment system to verify compliance with the fair trade principles. Fair Trade Original now carries out more reviews of the entire production chain to verify that everyone, including the people in the first links, benefit from the trade: for example, the organization verifies that both the craftsmen making leather bags and the workers in the tannery benefit from the trade. This approach results in increased attention to visible improvements in the income and working conditions of producers and workers at the beginning of the chain. These developments are initiated via the trading partners.

Approach Over the years Fair Trade Original has compiled a set of in-house instruments for the initiation, quantification and monitoring of developments at the organization’s trading partners. Important instruments in this set include the Economic Business Assessment and Basic Financial Monitoring System, the EFTA fair trade assessment sys-

Principles and business practise

folder_principes werkwijze_ENG_def.indd 1

30-11-10 17:43

The Principles and business practise publication specifies Fair Trade Original’s principles and approach.

tem and Business Development Plans. Where possible, the organization also makes use of the results from the fair trade audits conducted in connection with the Max Havelaar Seal of Approval. Economic Business Assessment The Economic Business Assessment (EBA) system is used to carry out annual quantitative assessments of each trading partner’s business development. This instrument awards a score to each of seven factors, namely general management, product and product development, production processes, financial management, logistics, human resource policy and marketing. The resultant score sheet provides an insight into the trading partner’s strengths and weaknesses and indentifies the need for improvements for inclusion in the Business Development Plan. The Basic Financial Monitoring System (BFMS), part of the EBA, relates to the compilation of a list of the most important key figures from the trading partners’ annual accounts of recent years. In 2010, the trading partners and local consultants frequently called in by fair Trade Original evaluated the EBA and BFMS. This evaluation resulted in a number of conclusions, for example that the user-friendliness of the instrument needs to be increased and that the business analysis does not reveal all crucial issues. A follow-on evaluation carried out by the Institute of Social Studies confirmed these conclusions. This resulted in Fair Trade Original’s decision to request a local consultant and a Dutch consultancy to make the necessary improvements to the EBA (and, consequently, to the BFMS). Fair Trade Original will commission the new system in 2011.

Fair trade inspections Fair Trade Original’s range of products for which Fair Trade standards are available bear the Fairtrade International (in the Netherlands, Max Havelaar) Seal of Approval. This seal of approval serves as the consumers’ most important guarantee for the fulfilment of the fair trade claim. 16 different products are currently governed by standards developed by Fairtrade International (FLO), in Bonn, Germany, namely coffee, cocoa, tea, sugar, honey, wine, fruit juices, rice, herbs, composite products, cotton, sports balls, fresh fruit, bananas, flowers and gold. FLO conducts annual audits of organizations with Fairtrade International certification to verify compliance with the fair trade principles. These audits provide an insight into the social (fair trade) capacity of the trading partners, producers and employees and yield recommendations for improvements. Where necessary, these recommendations serve as input for Fair Trade Original’s Business Development Plans. Fair Trade Original perceives its duties as including the preparation of its trading partners and producers for Fairtrade International certification. This certification offers them access to new markets and the opportunity to receive a development premium on their products. In 2010, the organization’s Turqle Trading trading partner in South Africa succeeded in receiving permission to display the Max Havelaar Seal of Approval on two herb mills: the pepper has been granted Fairtrade International certification. Work has also begun on the preparations for applications for Fairtrade International certification of the herbs and coconut marketed by MA’s Tropical Food on Sri Lanka and of the wheat and rice flour used in the noodles produced by the Amdo Food Company (India). Due to circum-

Fair Trade Original at the trading partners

Road link in Guatemala. Transport can be a serious problem for producers and can put the logistics planning in jeopardy.

stances, these preparations are taking longer than expected. The farmers and producers of six trading partners are receiving fair trade training which is not intended solely to provide for their certification but is also designed to retain their current level and improve their link in the chain. These famers and producers are rice and pineapple farmers in Thailand, wine and apple farmers and their employees in South Africa and sugar farmers in Malawi and Mauritius. EFTA fair trade assessment Fair Trade Original, in cooperation with EFTA (the European Fair Trade Association) developed an assessment system for the review of trading partners with products that are not covered by a Fairtrade International (Max Havelaar) Seal of Approval. This assessment system audits their compliance with fair trade principles. One of several colours (or ‘lights’) is awarded for each fair trade principle: green for full compliance with the fair trade principle, yellow for minor non-compliances and orange for practices that are unacceptable in fair trade and which, consequently, must be resolved immediately, and red when the management does not want to make any changes and when an issue awarded an orange grade in a previous audit is once again awarded an orange grade. In the last case Fair Trade Original terminates the collaboration. The results from the assessment, carried out in cooperation with local consultants, are used to identify points for improvement and initiate work on the necessary improvements. Fair Trade Original’s longer term objective is to arrange for an independent organization to carry out the assessment of trading partners with this model. Most of Fair Trade Original’s trading partners have now been assessed. The assessment is repeated after three years.

Fair Trade Original at the trading partners

The EFTA fair trade assessment system is continually being expanded: in 2010, the system was supplemented with a calculation of the living wage in the specific region. This calculation is carried out using the SA 8000 method: the total cost of sustenance is comprised of the cost of food and the cost of non-food as a percentage of the cost of food. A cost calculation method has also been developed which takes account of all the costs incurred in the preparation of the product from the producer right through to the time at which the order is loaded onto a vessel. Most of the lights at trading partner level are set to green or yellow. Improvements are being made in the fields of transparency and accountability, fair prices and wages, terms and conditions of employment, and the training of staff and producers. In general the lights of the producers (usually the workshops that make the products) are set to green for compliance with human rights, i.e. child labour, forced labour, discrimination and freedom of organization. However, the inadequate records kept by this frequently highly informal sector often preclude the demonstration of compliance with these rights by furnishing the requisite documentation. This is then punished by the award of many orange lights for transparency and accountability. Another important issue for attention is remuneration (see also page 55). In conclusion, most workshops still have a great deal of work to do on improvements to occupational health and safety and the training of the employees. The assessments of the trading partners and the producers that supply products to them that were carried out in 2010 were followed by the preparation of plans of action for the implementation of the necessary improvements within a stipulated period of time. The business consultants encourage and promote the completion of these

Trading partners taking part in the cost-price calculation workshop learn how to take all the costs incurred in the preparation of a product into account, from the producer right through to the time at which the order is loaded onto a vessel.

EFTA fair trade assessments Trading partner

Country

Product

2007

2008

2009

2010

Aarong

Bangladesh

Candles, interior decorations

Allpa

Peru

Gifts

AMDO

India

Noodles

Craft Aid

Mauritius

Cane sugar

x x

CRC

India

Scarves, leather goods

CreArte

Guatemala

Gifts

Crisil

Bolivia

Glassware

Dhaka Handicrafts

Bangladesh

Baskets

Eco Tasar Silk

India

Scarves

Eswatini Swazi Kitchen

Swaziland

Jam, sauces

FTCI

India

Bags

Kasama Trading

Thailand

Pottery

x x x

x x x x

Mai Vietnamese Handicrafts

Vietnam

Gifts

Sri Lanka

Herbs, coconut milk

Pt. Teduh Mitra Utama

Indonesië

Gifts

Sang Arun

Thailand

Pottery

x x

Sasha Exports

India

Accessories, gifts

South Africa

Culinary

Yak & Yeti

Nepal

Silver, gifts

Thailand

Gifts

External consultants Fair Trade Original lays firm foundations for fair trade in the countries of origin by training local consultants and trainers and deploying them in development programmes un-

x x x x

Y-Development

plans within the agreed deadline. As a result, everyone involved in the chain is continually engaged on the enhancement of the products’ fair trade claims - an approach which constitutes the essence of development trade.

x x

MA’s Tropical Foods

Turqle Trading

der the management of Fair Trade Original’s business consultants. A collaborative agreement had been concluded with the British TWIN organization for the coaching and development of cooperatives in Latin America and Africa. In 2010, contracts with 27 consultants/agencies were concluded in developing countries, some of which were for a number of programmes. Fair Trade Original calls in European consultants when specific knowledge is required. In 2010, this was the case with 14 consultants/agencies.

Fair Trade Original at the trading partners

Seminar The Fair Trade tools for a change seminar was organized in the Netherlands in the autumn of 2010. The objective of this seminar for all Fair Trade Original’s external consultants and business consultants was to outline joint strategies and plans for partner development in the years after 2010, when subsidies will no longer be available. Attention was devoted to the results from evaluations carried out by the Institute for Social Studies (ISS), Equip and ICCO (see page 66). The group then explored the development of project proposals and business plans and, in conclusion, drew up plans for mutual cooperation and the harmonization of the various programmes and projects.

Fair Trade Original at the trading partners

Fair trade principles Offering opportunities to disadvantaged producers

Other organizations have also made a great deal of progress in the past few years.

Fair Trade Original focuses on the improvement of the lives of disadvantaged producers. Fair Trade Original achieves this objective by creating jobs, improving incomes and working on empowerment to give people at the beginning of the production chain more influence on their living and working conditions, their organizations, their lives and their future. It is not without reason that many of the fair trade principles are focused directly on the economic progress and wellbeing of these people.

Justifiable labour No child labour: Fair Trade Original products are made without child labour (children below the age of 16). When children help then this may never be to the detriment of their schooling, health, or time to play. The organization must be able to demonstrate that it does not employ child labour.

Offering opportunities to disadvantaged producers Fair Trade Original cooperates with trading partners that conduct an explicit fair trade mission and policy which are focused on disadvantaged producers and workers. Fair Trade Original supports trading partners in the development of their mission and/or core values and the development of their plans for the socio-economic development of their producers and the producersâ&#x20AC;&#x2122; employees. The 2010 EFTA Fair Trade Assessments devoted attention to the development of an explicit mission which highlights the fair trade concept of working with and for disadvantaged groups. This mission must be made known to all the relevant employees and producers and, consequently, must be communicated in the local language on, for example, the order forms. Organizations such as Teduh Mitra Utama (Indonesia) excel in these communications: the auditors saw signs displaying the organizationâ&#x20AC;&#x2122;s mission and the ten fair trade principles in all the workshops visited during the assessment.

No forced labour: Fair Trade Original condemns every form of violence and compulsion. The EFTA fair trade assessments carried out in 2010 did not reveal any instances of child labour or forced labour. However, many producers do not have suitable systems for auditing in place, for examples records containing copies of the proof of identity of the employees. Although everyone knows everyone at the smaller workshops, it is nevertheless necessary to demonstrate that no child labour is employed. Equal opportunities No discrimination: all producers or employees are entitled to equal payment for equivalent work, equal treatment and equal job opportunities. Women at some workshops, for example in Bangladesh but certainly also in other countries, carry out lower paid work such as finishing and polishing. The men carry out the work with status: they operate the machine, weaving loom or potterâ&#x20AC;&#x2122;s wheel or are assigned to the position of workshop foreman. As a result, many women receive

All workplaces at Teduh Mitra Utama, in Indonesia, are equipped with signs displaying the fair trade principles

lower pay. This principle often results in fierce discussions during the feedback workshops organized to review the EFTA fair trade assessments. Fair Trade Original assists organizations in the preparation and implementation of plans to create equal opportunities for women, for example by means of training women and men, where relevant, positive discrimination during the recruitment of new staff, modifications to machines and crĂ¨ches. Freedom of organization: the trading partner shall provide its producers and employees the freedom to organize themselves in trade unions or elect employeesâ&#x20AC;&#x2122; representative committees. Many countries, such as India and Bolivia, are fearful of the pronounced detrimental influence trade unions can exert on some companies. For this reason many owners of workshops and factories are not even supporters of an elected employee committee. Nevertheless, Fair Trade Original upholds this principle in view of the continually increasing number of favourable developments in this field, such as Black Economic Empowerment programmes and the Joint Bodies of agricultural labourers in South Africa. Workshops with more than 50 employees are under the obligation to work on elections for employee committees and the provision of the associated training. An orange light was set for this issue in three assessments carried out in 2010. Fair Trade Original is assisting these organizations to ensure that the non-compliances are resolved in 2011. Justifiable working conditions Fair terms of employment: the companies with which Fair

Fair Trade Original at the trading partners

Trade Original cooperates have implemented contracts of employment that provide for and lay down terms and conditions of employment pursuant to the relevant national or international legislation. Most organizations making gifts & living products for Fair Trade Original operate in the informal sector. Although most export and marketing organizations have made appropriate arrangements for the terms and conditions of their employees, the producers (workshops) usually keep only the absolute minimum of books. Producers receive a green light for this principle when attendance and/or salary books are present which state how many people work for the producer, the hours or days they have worked or the number of units they have made, a specification of their salary and their signature to demonstrate that they have received their salary. However, in most cases these books are absent and the employees have little idea whether they are paid a fair wage, what overtime is or what a fair working week is, etc. Those producers who were subjected to a second assessment had made substantial progress in this issue. Organizations that have received Fairtrade International certification can still make many improvements to the terms and conditions of employment of contracted day labourers. Health and safety at the workplace: the work carried out for Fair Trade Original has, within reasonable margins, to be both safe and healthy. A great deal of work still has to be done on health and safety at workplaces, in particular in the informal sector. The workplaces are often small, poorly lit, poorly ventilated and equipped with machines without safeguards:

Producer in Vietnam. Fair Trade Original assists trading partners with the preparation and implementation of plans to create equal opportunities for women.

the employees often have no protective clothing, no firstaid kit, no clean drinking water and no (clean) toilets. Progress in this area is generally rapid, since the partners have the motivation needed to make improvements. One example is the palm-wood workshop in the Mekong Delta, in Vietnam, which was greatly improved following an expansion and the installation of more light and appropriate ventilation. These improvements in turn increased the quality of the products Transparency Accountability: All parties in the trading chain are transparent and maintain clear administrative records. A great deal of work has still to be done on transparency and accountability in the informal sector. Most of the umbrella organizations have implemented the necessary measures: this is an issue included in the FLO assessments of their operations. However, bar a few exceptions the base cooperatives and smaller workshops keep virtually no books. Although the umbrella organizations provide the producers appropriate information about orders, product development and quality requirements, in general communications in the chain still exhibit considerable scope for improvement. Chain responsibility: all those involved in the chain bear the responsibility, on the basis of their position in the chain, for the origin of the raw materials, the quality of the products and production processes and compliance with the fair trade standards. Fair Trade Original encourages its trading partners to actively trace the origins of raw materials and ingredi-

Fair Trade Original at the trading partners

ents further and further back in the chain. The relevant target stipulates the traceability of the origins of at least 90% of the (dry) weight of each product. In a number of instances Fair Trade Original actively assists trading partners in tracing the origins or in sourcing their needs from new, preferably fair trade, suppliers. Capacity-building Fair Trade Original expects its trading partners to support their producers and employees in the implementation of improvements in the business and social elements of their operations. During the past five years Fair Trade Original and its trading partners have devoted continually increasing efforts on capacity building at producers and their employees further and further back in the chain. Examples of this work are to be found in the reviews of the various development programmes. Promotion of fair trade All players in the chain are familiar with the objectives and principles of fair trade, and inform their customers and suppliers accordingly. The introduction workshops organized for the EFTA fair trade assessments have proved an effective means of providing a thorough re-review of the fair trade principles. Most of the trading partners who were assessed in 2010 organize at least one meeting a year to explain the substance of fair trade to the producers. In 2010, Fair Trade Original once again organized many fair trade training courses for farmers and their employees which explain what fair trade entails, the fair trade issues

Workplace in Peru. Safety improvements at the workplace can often be made very simply and rapidly.

which are inspected during assessments, what is involved, how everything can be organized and how decisions on the allocation of development premiums should be made. Nevertheless, some farmers - in particular, in the larger organizations and even the organizations that received Fairtrade International certification years ago - do not know what precisely fair trade is or, on occasion, have never even heard of fair trade. A great deal of work still needs to be done in this area. In 2010, Fair Trade Original also communicated its Principles and Method to the organizationâ&#x20AC;&#x2122;s staff. Two workshops used case studies and dilemmas to explain these principles and their implementation in practice.

Care for the environment In addition to the fair trade principles focused on the people involved in development trade, one important principle is focused on the protection of the environment. Care for the environment Fair Trade Original, its producers and trading partners endeavour to minimize the environmental impact of production and trade by the responsible use of natural resources and the responsible management of waste. The environment is acquiring an increasingly important position on the agenda for Fairtrade International certification. Most customers and consumers expect products bearing a seal of approval to be sustainable from every perspective. The EFTA fair trade assessments carried

out in 2010 revealed that these trading partners also exhibit an increasing awareness of environmental issues. A weaver at Sasha in Fulia, India, had introduced and effective and affordable system for the processing of waste dyes which avoided their contamination of groundwater. Another excellent initiative was the development of ecologically responsible leather by one of the tanneries of the Craft Resource Center in India. This latter development cuts both ways: the reduction of the use of toxic substances also results in a substantial improvement in the tanners working conditions. The first wet processing of coffee berries is increasingly carried out in environmentally-friendly washing stations or, as they are referred to in Latin America, beneficios humidos. These stations use water more prudently and the toxic water containing coffee pulp is not simply discharged into a stream. The pulp is also re-used to make compost or generate energy. Trading partners running great environmental risks will, within the context of the EFTA fair trade assessments and Fairtrade International inspections, need to devote more attention to environmental issues in the future. These are trading partners with producers who use toxic dyes or other toxic substances, consume a large amount of water or energy (ovens) or damage the environment in some other manner. Thorough environmental impact studies will need to be carried out at these producers, followed by the preparation of plans of action for the improved use of natural resources, the responsible management of waste and water consumption, and the reduction of CO2 emissions.

Fair Trade Original at the trading partners

Many fair trade rice farmers in Thailand are switching to organic cultivation.

Fair Trade Original at the trading partners

Powerful entrepreneurs The trading partners must be able to make a profit and achieve sustainable growth. In addition, the fair trade chains are endeavouring to achieve the fairest possible distribution of value and profit. The producers are entitled to fair prices based on the cost of the products and their employees are entitled to fair wages that enable them to sustain their families. These objectives are also expressed in terms of fair trade principles. p Fair trading conditions Advance financing: Fair Trade Original offers its partners advance financing of 50% of the amount of the order to bridge the period between the acceptance of the order and payment. This places the producers in a position to make the product: they can buy the raw materials they need and pay their employees. Procurement organizations such as coffee cooperatives need advance financing to procure coffee from the farmers. Food and coffee partners pay interest on these advance payments, but gifts & living partners do not as yet pay interest. Many producers do not make use of Fair Trade Original’s advance financing, but take out loans from local banks. Long-term trading relationships: Fair Trade Original strives for trading contacts of at least 5 years so that the organization can invest in these business relationships and the producers are offered an opportunity to achieve sustainable development. The trading partners are in turn expected to enter into commitments with their producers and employees for the same reasons.

Fair Trade Original has worked with 42 of its 55 trading partners for more than 5 years (see from page 67). Capacity-building Fair Trade Original invests in the capacity-building of its trading partners to enable them to develop themselves into reliable and powerful players in the export market. Trading partners are encouraged to draw up Business Development Plans so that they can improve their operations in terms of capacity, quality and management, etc. Fair Trade Original has implemented its KLIMMMOPS model for this purpose (see also page 59 ff). The Economic Business Assessment (EBA) system is used to carry out annual quantitative assessments of each trading partner’s business development. The results are then used to make any adjustments to the Business Development Plan that may be required. This structural approach, in combination with the decision to engage in long-term cooperation with its trading partners, results in Fair Trade Original’s possession of a unique position in the sector. However, it is usually difficult to demonstrate a direct relationship between Fair Trade Original’s custom and the growth in the trading partners’ turnover and profits, since Fair Trade Original is not the sole player and numerous internal and external factors also determine the development of the trading partners. A fair price Fair Trade Original pays its trading partners a price which is above the cost price. This price is set in consultation with the trading partner on the basis of a cost-price calculation. A minimum guarantee price is specified for prod-

Development premium: Fair Trade Original supplements its payment of the procurement price of food to its trading partners with a development premium that enables them to make socio-economic investments for the benefit of the farmers and/or employees. This is illustrated by the following selection of examples: Development premium (in euros) Paid for Coffee (Africa, Latin America) Honey (Chile, Guatemala) Culinary products (South Africa)

2009

2010

119,000 145,000 8,500

10,000

16,400

20,000

ucts with the Max Havelaar Seal of Approval which is based on the average cost price. A premium is also paid on the price of these products for the purpose of socioeconomic development. Fair Trade Original has set itself the objective of collecting cost price information for products with a procurement price agreed on the basis of negotiations with the trading partner. To this end a database was developed in 2010 which shall be used to make records of cost price information. Agreements have also been reached with the trading partners on the submission of cost-price calculations for each product. Fair Trade Original expects that the organizationâ&#x20AC;&#x2122;s assessments of the quality of these cost-price calculations and feedback on the calculations will make a contribution to the trading partnersâ&#x20AC;&#x2122; development of a commercial attitude. About half of the trading partners involved have now submitted the requested cost-price information. Fair Trade Original will endeavour to enter records of 80% of all requested cost-price calculations in the database in 2011. In 2010, Fair Trade Original also worked with the gifts & living trading partners on the development of a simple cost-price calculation system which begins with the producer and ends with the price Fair Trade Original pays to the trading partner (free on board/FOB price). Workshops have also been organized relating to the preparation and analysis of cost-price calculations. One important element of cost-price calculations relates to the determination of a living wage, i.e. a wage based on the income needed to sustain a family. In 2010, Fair Trade Original selected a method for the calculation of a living wage on the basis of the Social Accountability Interna-

tional (SAI) method. During the past year all consultants who carry out the EFTA fair trade assessments received training in the use of the model to calculate the living wage. All trading partners who were subjected to an EFTA fair trade assessment received an explanation of the importance of a living wage and the manner in which this is calculated. p Ten organizations were assessed in 2010. The assessments revealed that the wages that were paid, in particular at producer level, often had yet to meet the criteria stipulated for a living wage. Fair Trade Original and its trading partners are now confronted with the challenge of attaining a living wage within the near future. This is not a problem confronting solely Fair Trade Original: the entire sector faces this problem. Although Fair Trade Original has taken the lead in resolving this problem, increases in incomes in the informal production sector will be feasible solely when the issue is addressed in a broad international context. The aforementioned ten trading partners were requested to draw up a plan for the attainment of a living wage. However it has transpired that this is not easy, and for this reason Fair Trade Original will increase its assistance in this field in 2011. This can result in fundamental changes in some instances, not only in the prices to be paid but also in the organizationsâ&#x20AC;&#x2122; production processes, productivity and efficiency, mechanisation and wage structures. It will also be necessary to review how these changes and plans can be financed.

Fair Trade Original at the trading partners

Living wage A living wage covers the minimum cost of sustaining a family. This sustenance is comprised of food and non-food costs. The non-food costs include the expenditure on housing, transport and schooling. The food costs are calculated on the basis of the price of a food basket which provides about 2100 Kcal per person per day. The non-food costs are calculated as a percentage of the total food costs. It is also necessary to save for marriage, funerals, illness and old age. The calculations for each country also take account of the average size of families, differences between urban and rural regions and the average number of breadwinners in the families. Fair Trade Original specified up-to-date living wages for ten regions or countries in 2010. It proved difficult to find the correct data and moreover, no useable database is available anywhere in the world. Fair Trade Original, in cooperation with EFTA, the National Association of Worldshops, Fairtrade International, SAI and local NGOs, shall search for a structural solution to this problem to ensure that the correct data are available for every country and region.

Fair Trade Original at the trading partners

Development programmes Fair Trade Original and the trading partners in Africa, Asia and Latin America review whether any improvements to the chain are necessary and, if so, which. Bottlenecks can be present in the organization (management, information systems, logistics) or at product level (quality, product development). Reviews are also carried out of the working and living conditions of the farmers, handicraftsmen and employees to identify any necessary improvements. The objective of this targeted approach is to enable the trading partners to improve their accommodation of the (mainstream) markets’ requirements and to ensure that sustainable development is achieved with due regard for the fair trade principles. The above reviews result in development programmes in which Fair Trade Original assists the trading partners in the management, financing and, on occasion, the implementation. Fair Trade Original received funds from the Ministry of Foreign Affairs, within the scope of MFS 1, HIVOS, ICCO and PSO for the implementation of these development programmes. These funds provided for the implementation of four development programmes at a total of 41 trading partners (see the summary on page 67 ff.): 1 MFS Change the World Branding Programme 2 ICCO Change the World Drinking Programme 3 Hivos Food Safety, Quality & Traceability in Fair Trade Programme 4 PSO Capacity-building of African Fair Trade Chains Programme

1. Change the World Branding Client: Ministry of Foreign Affairs Period: 2007-2010

The Change the World Branding programme encompassed the challenge of achieving a substantial expansion of Fair Trade Original food and gifts & living products into the Dutch and European mainstream markets within a four-year timeframe. An expansion of the market was necessary for the substantial growth of the volume of sales of these products to enable the trading partners to offer their producers and employees sustainable jobs and incomes. The programme, in which a total of 40 of Fair Trade Original’s trading partners were involved, was comprised of four sub-programmes: 1 Brand New Markets 2 Branding in the South 3 The Fair Trade Original brand 4 Fair Trade Original in the mainstream market The cost of this programme amounted to € 1,993,000 in 2010. The Ministry of Foreign Affairs contributed € 1,420,000 to the programme and the remainder was financed by Fair Trade Original. 1.1 Brand New Markets This first sub-programme of the MFS Change the World Branding programme was focused on the development and capacity-building of trading partners and producers.

Course for employees in South Africa. Women gain an improved insight into health and family matters to enable them to improve their control of the situation at home.

Partner & product development Endeavours were made in 2010 to begin cooperation with two new food trading partners, the development of five new food products and the renewal of half of the gifts & living product range.

• Stellar Winery and UniWines, South Africa: these new trading partners began delivering wine in the autumn of 2010. Stellar Winery (organic wines) is working on improvements of the quality management system. HACCP certification is expected in June 2011.

New trading partners were selected on the basis of the following criteria: • the product must be marketable or to become so within the near future; • the organization is focused on disadvantaged producers and workers (visible in the organization’s mission, plans and activities); • a potential for Fairtrade International certification, no red lights in the first EFTA fair trade assessment.

The results achieved in food product development in 2010 were (see also Marketing, page 36): • Introduction of Pepper Sweets and Herb Mix from South Africa; • Improved coffee range; • Introduction of sandwich filling portion packs; • Modernized wine range; • Initiation of work on the development of an Asian line, introduction in the autumn of 2011; • Initiation of work on the development of baking mixes, introduction in March 2011; • Market research for tea, introduction of new range in the autumn of 2011; • Development of breakfast cereals, introduction in the autumn of 2011;

The results achieved in food partner development in 2010 were: • KRS Spicy Food, Northern Food Complex and their suppliers in Thailand worked on products for a new Fair Trade Original Asian culinary line. An extensive programme was set up for the development of the various chains and the preparations for Fairtrade International certification of three ingredients (sugar, soya and peppers); • Apple farmers in South Africa: a new farm was granted Fairtrade International certification and now supplies apples to Granor Passi; • Mauritius Sugar Syndicate, Mauritius: following the Fairtrade International certification of five cooperatives of cane sugar farmers in 2009, a further 27 cooperatives were engaged on the Fairtrade International certification process in 2010;

The results achieved on gifts & living partner development in 2010 were: • Development of ecologically responsible leather in cooperation with a tannery and Craft Resource Center in Kolkata, India; • Development of a textile line of organic and Fairtrade International certified cotton in cooperation with Fair & Co (NL) and Chetna Organics and Rajlakshmi Cotton Mills in India; The results achieved in gifts & living product development in 2010 were (see also page 31 and ff.):

Fair Trade Original at the trading partners

The coffee range was adjusted to the flavour preferences of the average Dutch consumer so that the range would appeal to an even greater target group.

• Introduction of leather goods made from ecologically responsible leather from India; • Introduction of textile line of organic and Fairtrade International certified cotton from India; • Development of the FAT range of crockery from Thailand in cooperation with Piet Hein Eek, introduction in 2011; • Product development for mainstream customers at Aarong and Dhaka Handicrafts in Bangladesh, Conserve and Sasha in India, Yak & Yeti in Nepal, and Sang Arun in Thailand. • Inclusion of Hampi products and the Rainbow Collection. Business Development Plans: Business Development Plans were implemented at 25 food trading partners and 15 gifts & living trading partners that were focused on the improvement of their position of the market with increased turnover, higher profits and more long-term customer relationships. This work was carried out using what is referred to as the KLIMMMOPS model, i.e. Quality, Logistics, Information, Management, Marketing, Monitoring, Organization, Product development, and Social (fair trade) development. The issues addressed at each trading partner were the issues that constituted a real impediment to growth, correct exports and compliance with the fair trade principles. p

KLIMMMOPS in practice The KLIMMMOPS model was implemented within the context of the Business Development Plans at the various trading partners to address the following issues: Quality A great deal of attention was devoted to quality management at food processors, such as HACCP at Turqle Trading in South Africa, AMDO in India, Eswatini Kitchen in Swaziland, the new KRS Spicy Food chain in Thailand, Coopiasuro in Guatemala and Apicoop in Chile. The EU’s General Food Law stipulates that the implementation of HACCP is a mandatory requirement for product access to the European market. Fair Trade Original uses an in-house HACCP Checklist to assess HACCP systems. A HACCP workshop was organized in South Africa in 2010 in cooperation with Swift, a local quality bureau. This revealed that the threshold for the use of HACCP is lowered substantially once producers have worked with the system for the first time. The gifts & living Quality Manual was also updated and distributed to all the relevant trading partners. The information in the manual has been revised and supplemented with new EU legislation. Work was carried out on quality on a one-to-one basis with

Fair Trade Original at the trading partners

FTCI, TARA Projects and Eco Tasar Silk in India, Aarong in Bangladesh and Mai Vietnamese Handicrafts in Vietnam. Quality Assurance workshops were organized for the staff and producers of Aan Yak & Yeti in Nepal and Mitra Bali on Bali. Conserve, an Indian producer of recycled products paid a visit to Fair Trade Original, in particular for a discussion of quality requirements. Logistics Packaging and logistics workshops were organized for the warehouse staff and other staff at gifts & living trading partners in Bangladesh and India in 2010. These workshops focused primarily on the requirements imposed by customers in the mainstream markets. A study was carried out at Mai Vietnamese Handicrafts (Vietnam) and recommendations were submitted on the safe (dry) shipment of the palm-wood baskets. Attention was also given to delivery conditions during Conserve’s visit to Culemborg in December. Information Across the board attention has been devoted to the provision of information within the chain: training producers in the fair trade principles, the provision of information about trends and market developments to the trading partners and the collection of information for the trading partner profiles on Fair Trade Original’s website. Streamlining information was also an important element of the management systems implemented at coffee and cocoa organizations.

Marketing Marketing is assigned a high place on the trading partners’ agendas. The form of this marketing depends on the type of product and the markets targeted for growth. Many trading partners attended trade fairs in 2010, either as exhibitors (in some instances with support from the Dutch Centre for the Improvement of Import from developing countries, the CBI) or as visitors to gain new ideas. Others worked on their packaging, submitted their coffee to renowned taste panels or worked on their website. Fair Trade Original gave the trading partners advice on their marketing strategy during visits. This advice often also returns to a discussion of the importance of an appropriate focus. A Dutch student attempted to develop and implement a marketing plan at one of the trading partners in 2010. However, the results were fell short due to a lack of involvement on the trading partner’s part. This once again reveals that two-directional traffic is a condition attached to success. Management Fair Trade Original and the British TWIN colleague organization worked together on the provision of management support to coffee cooperatives. A comprehensive evaluation of the process was carried out with most of the cooperatives in 2010. The Pricing work instrument was modified. Market analyses

Fair Trade Original at the trading partners

were carried out with a number of cooperatives and attention was devoted to risk management, in particular relating to price fluctuations.

TARA Projects (India) specifically on product development for the participation in the Ambiente Trade Fair.

Mitra Bali (Indonesia) developed a business plan. Costprice calculations are an issue on all the trading partners’ agendas. Additional attention was devoted to costprice calculations during the visits to Sang Arun and Y-Development in Thailand and at Vietnam’s Mai Vietnamese Handicrafts.

Social/fair trade Fair Trade Original is increasingly engaged on the construction of new fair trade chains, the introduction of the fair trade principles at new producer groups and the preparation of producer groups for fair trade certification. This offers them access to the development premium paid on fair trade products. In 2010, South Africans allocated the development premium to training courses for workers and farmers in life skills, the organization of employees’ committees and fair trade. AMDO, in India, allocated the premium to coolers in the employees’ homes. All other food trading partners also received the development premium and decided on the allocation of the premium with or without the cooperation of other fair trade and development organizations.

Monitoring A Economic Business Analysis (see Approach, page 47) was carried out at most trading partners to assess their commercial progress. Ten trading partners were subjected to an EFTA fair trade assessment in 2010. This was succeeded by an intensive follow-up and monitoring. Organization An ISO9001:2008 workshop was organized at Allpa, in Peru, for the staff. A workshop was organized at Acipar, in Brazil, to prepare for the strategic planning. Seven Fedecocagua coffee cooperatives in Guatemala were reinforced (see the case on page 10). Product development Fair Trade Original cooperates with trading partners and producers throughout the year on the development of new products for its range. The organization worked with

1.2 Branding in the South The Branding in the South sub-programme was focused on the development and market launch of an own brand by five trading partners in three continents. The underlying idea was that the partners could add value to their products by developing an own brand. The implementation of Branding in the South was outsourced to Good Opportunity (GO!). The Brand Trinity Group was responsible for the strategic guidance of the sub-programme. Two South American trading partners terminated their participation in the programme prematurely due to the discontinuation of their operations. It transpired that the Kenyan partner did not currently have the strength to develop an own brand. p Lessons learnt The sub-programme was of an experimental nature as branding in this form is a new development. Many experiments were carried out and the associated insights developed over the course of time. Some lessons learnt were: • ‘Fair’ was one of the pillars on which all the brand concepts were built and was the source of their strength. • An own brand requires, in contrast to the production of private labels, active management and a conceptual approach: the marketing of a total story that highlights the added value offered by the brand. Many participants experienced difficulties with this transition. • An active distribution strategy was found to be a condition attached to the construction and activation of a brand: for example, participation in trade fairs was worthwhile solely when thorough preparations were made for the event.

• Some participants trailed in their entrepreneurship, basic business principles and networking because they were accustomed to operating in the fair trade market. • The intention to train a number of local consultants into brand consultants during this period proved to be overly ambitious. • It is uncertain whether individual entrepreneurs will opt for branding in the absence of additional financial support. Consequently, the design of the sub-programme would appear to be dependent on subsidies. Offering elements of the brand process in modules would speed the pace of the process and increase the feasibility of the participants associated budgetary planning. It transpired that the sub-programme was able to deliver brands which drew attention at trade fairs. At least three of the four brands would appear to be viable: whether this is actually the case will be revealed in 2011. Fair Trade Original will not continue with branding at the trading partners after 2010. The sub-programme can be continued under GO! should the trading partners so decide. For the time being Fair Trade Original will focus on the development of sustainable fair trade chains under the Fair Trade Original brand. 1.3 The Fair Trade Original brand Fair Trade Original will be able to bring the products of its trading partners on the market with success only when the organization works on the strength of its brand in parallel with the development at its trading partners. In 2010, the brand was enhanced as a result of activities including the following:

Fair Trade Original at the trading partners

Four new brands Four new brands were ultimately born: Bai Mai, pottery made by Kasama in Thailand, which was introduced on the market at the beginning of 2010 via the Ambiente Trade Fair in Frankfurt. Considerable quantities were sold to customers all over the world. Kasama found a distributor at Frankfurt who exhibited the brand at the Paris Maison et Objets Trade Fair at the beginning of 2011. Sasha, the art of giving, of Sasha in India, was introduced on the market via the Paris Maison et Objets Trade Fair in September 2010. The first orders were booked at the Trade Fair. Sasha once again attended the Paris Maison et Objets Trade Fair in January 2011. Ten of the 43 contacts have been followed up as high priority. Cape Treasures, culinary products of Turqle Trading in South Africa, was launched via the Paris SIAL Trade Fair in the third quarter of 2010. Turqle Trading is now following up the no less than 101 contacts made during the Trade Fair. Turqle Trading also started a matchmaking project in the UK at the end of 2010 which is intended to result in tangible trading contacts in 2011. Ma’s Happy Life Kitchen, of Ma’s Tropical Food in Sri Lanka, was also introduced during the Paris SIAL Trade Fair. The limited preparations resulted in a low number of new trading contacts. In the first instance Ma’s Tropical Food brand targets the local market.

• modernization of the website; • a playful WEEK NA (‘week after’) campaign immediately after the end of the Football World Cup in South Africa; • the Products with a special story TV campaign More information about these campaigns is given on page 37. A brand survey revealed that Fair Trade Original’s brand awareness target of 50% at the end of 2010 was exceeded by an ample margin. 1.4 Fair Trade Original in the mainstream market Food A stronger brand shall need to result in an increasing distribution of food products via the supermarkets. The targets stipulated for this sub-programme were also exceeded by an ample margin. More information is given on page 27 ff. Gifts & living This sub-programme also encompasses growth ambitions for gifts & living products in the mainstream sales channels. However, the introduction of products at wholesalers and department stores was slower than had been hoped, in part due to the financial crisis that compelled many businesses to take a step back. However, the New Business customer portfolio has increased, as a result of which the dependency on a number of major customers has decreased. Gifts & living products made their entrance at De Bijenkorf, Sissy Boy, Conran Shop, Wehkamp and Edelman in 2010, in part due to Piet Hein Eek’s new collections and the new Fair + Green label.

Fair Trade Original at the trading partners

2. Change the World Drinking Client: ICCO Period: 2007 – 2010

The Change the World Drinking Programme was financed by ICCO and had the same objectives as the Change the World Branding Programme, in this instance with the focus on a dozen suppliers of jams, juices and wines in South Africa and Latin America. The programmes were guided by Fair Trade Original’s business consultants and local consultants. In 2010, ICCO contributed € 150,000 towards the € 225,000 total cost of this sub-programme. The programme was evaluated by an external bureau at the beginning of the year. Visits were paid to the Cuban ANAP organization of orange growers, the farmers and their labourers who supply apples for apple juice in South Africa and the Citrusdal Wines wine partner, also in South Africa. A visit to a wine partner in Chile had to be cancelled due to the earthquake. The most important conclusions from the evaluation were: • Fair Trade Original is an important supplier of fair trade food in the Netherlands. It is difficult to confirm a oneto-one relationship between this increase in volume and the higher incomes of farmers on the basis of figures as too many other factors also play a role. However, South African agricultural labourers do now earn more than the local minimum wage. Cuban labourers state that things are better for them on a fair trade farm than on a conventional farm.

South African agricultural labourers working at fair trade vineyards earn more than the local minimum wage.

• The opportunities fair trade offers to employees and producers are of at least equal importance: labourers and producers referred to improvements including personal, agricultural and social development and empowerment. They are of the opinion that Fairtrade International certification is finally enabling them to benefit from internationally-recognized labour rights and the social development of their community. • The introduction of Fair Trade Original products in Dutch supermarkets has been a success. However, on occasion the continuity of supplies of these products is vulnerable. This needs to be resolved by finding more second suppliers. • This is also in part the reason why Fair Trade Original is increasingly procuring products from larger suppliers who can supply quality products in large quantities. These suppliers are not always in need of capacity-building to meet the demands imposed by the export market. However, Fair Trade Original does offer added value in the fields of fair trade certification and the provision of fair trade training to farmers and labourers. These suppliers are not usually able to carry this out themselves. • Fair Trade Original also improves contacts between the organizations and their employees. The training courses provided for Joint Bodies (bodies in which the employees participate in the decision-making on the allocation of the development premium) on issues including the fair trade principles and joint decisionmaking on the allocation of the development programmes are usually an eye-opener for both the employees and the employers. • Fair Trade Original’s work and monitoring instruments such as the Economic Business Analysis are focused

on export and marketing organizations. It is recommended that instruments of this nature also be developed for links earlier in the chain, such as the farmers and labourers. • Fair Trade Original shall also need to carry out more work on context and chain analyses before investing in new chains. This will in turn require the development of new work instruments and modules for tailor-made training courses. The implementation of this Programme and the evaluation were highly instructive with respect to the performance of benchmark measurements and chain analyses, the definition of SMART targets and the formulation of forecasts of results with those involved. This revealed the areas in which Fair Trade Original excels, which are the areas on which the organization will need to focus: the provision of training courses to farmers and producers on the fair trade method and the preparations for fair trade certification. These lessons learnt were then used to carry out a review of Fair Trade Original’s work instruments. These lessons learnt shall also be used during the formulation and implementation of new programmes, such as the development of new chains in the fruit sector.

3. Food safety, quality & traceability in fair trade Client: Hivos Period: 2007-2010

The objective of this Programme was the development and implementation of quality management system at 25 organizations of coffee, cocoa and nut producers in

Fair Trade Original at the trading partners

Nature violence Fair Trade Original has not formed any specific funds for emergency aid, although the circumstances sometimes compel the provision of extra support. Fair Trade Original does not have any trading partners on Haiti. However as the first product the organization ever imported came from Haiti, Fair Trade Original decided to respond to the earthquake in January 2010 by auctioning the last statuettes in stock. The Haiti Project Foundation invested the proceeds from this auction, € 6,600, in the local production of water treatment units. A severe earthquake occurred in Chile in February 2010, followed by a Tsunami. Fair Trade Original trading partners were also afflicted. Vinos Lautaro was able to provide its vineyards financial support from the fair trade development premium. Fair Trade Original granted the Apicoop honey cooperative a loan for the repair of severely-damaged beehives. Guatemala’s Pacaya volcano erupted at the end of May, immediately followed by the Agatha tropical storm. Fair Trade Original’s Fedecocagua coffee partner incurred severe material damage. CreArte’s producers suffered a great deal of personal misery. Fair Trade Original assisted in the restart of production and trade where necessary.

Latin America. The 2010 costs of this programme, â&#x201A;Ź 37,500, were financed by Hivos. The general quality management system was in part based on the principles of the ISO (International Organization for Standardization), although interpreted further in terms of the everyday practice of and experiential perceptions of small farmers who export their products under fair trade conditions. The underlying idea was that the introduction of a system of this nature would improve the organization of the operations and the management and, as a result, save time and funds that would otherwise be allocated, for example, to claims and inspections. p Four Latin-American coaches/consultants who worked on the Food safety, quality & traceability in fair trade Programme each assisted six or seven producer organizations in the development of quality management systems tailored to their organizations, training the quality team and the regular performance of internal audits. Practice-oriented workshops, regular visits and remote monitoring (by Skype and e-mail) were used to assist the organizations throughout the entire process consisting of the presentation of the quality management system, the preparation of an inventory of the business processes, the formulation of procedures and the compilation of a quality manual, etc. The British TWIN development organization carried out a similar programme in Africa: the training materials for the programmes were developed jointly by TWIN and Fair Trade Original. It transpired that some organizations were unable to integrate the entire quality management system effec-

tively throughout their organization. However, the description and examination of the various business processes within the relevant organization often resulted in a critical review of the manner in which certain work was organized and of possible improvements to the organization of the work. In conclusion, a sustainable quality management system was introduced at and with ten organizations in Latin America in 2010. A number of these organizations have since arranged for ISO 9001:2008 certification. This revealed that their quality management system served as an excellent point of departure for certification.

4. Capacity building of African fair trade chains Client: PSO Period: 2009-2010

This Programme began in mid 2009 at a dozen umbrella (export) organizations of base cooperatives of coffee, cocoa, and sugar farmers in East (Uganda, Tanzania), West (Ghana) and Southern (Malawi, Mauritius) Africa. The programme was comprised of three sub-programmes: 1 Capacity building of African trading partners 2 Capacity building of African consultants and Business Service Organizations 3 Cooperation with and the coordination of development programmes in the regions. The 2010 financing of â&#x201A;Ź 218,000 was received from PSO, an association of almost sixty Dutch development organizations which is focused on the capacity building of organizations in developing countries.

Fair Trade Original at the trading partners

Quality Management System The quality management system is designed to map the internal cohesion between the work processes in an organization and to implement incremental improvements. An instrument developed specifically for the purpose enables organizations to formulate points for improvement that will have the greatest impact on the organization. This provides for the improvement of the various business processes, i.e. the productivity, customer satisfaction, efficiency and internal communications. This in turn enables the producer organizations to remain in the market, improve their ability to withstand the competition and, at the same time, comply with fair trade and other principles.

4.1 Capacity building of African trading partners The objective of this sub-programme was to increase the effectiveness and efficiency of the African trading partners in their commercial dealings with their customers and the support of their members. The assistance provided to the spokespersons of two coffee export organizations in Tanzania (KCU) and Uganda (ACPCU) was competed in 2010. They collect the data of the base cooperatives, i.e. the number of farmers, number of hectares, number of coffee shrubs, estimated harvest, the quality and each farmer’s sales to the base cooperative. They jointly entered these data in the umbrella organization’s central database to enable the organization to improve the planning of exports, conclude the correct contracts and have the data available required for organic and fair trade certification (more information is given on page 70). The five-year plan for Sidama Coffee Farmers Cooperative Union, in Ethiopia, was completed in 2010 and submitted to the board and the members. This plan encompasses the improvement of services to the members, an enhanced organizational structure and a planning, monitoring and evaluation system based on the Outcome Mapping method. The Ankole Coffee Producers Cooperative Union (ACPCU), in Uganda is a relatively new organization of 6,000 coffee farmers in the remote and poor Bushenyi district of Uganda. ACPCU’s 14 base cooperatives were granted fair trade and organic certification in 2010. The conversion programme was financed by the Rabobank Foundation: Fair Trade Original brought the two parties together.

Fair Trade Original at the trading partners

New coffee cooperatives were found in Tanzania and Rwanda which supply Arabica coffee. Plans will be developed with these cooperatives in 2011. The cooperation with another coffee cooperative was suspended for the time being due to rumours of corruption and the unwillingness of the board and management to disclose all information about the cooperative. 4.2 Capacity building of African consultants and Business Service Organizations Fair Trade Original is working on a network of local fair trade consultants and Business Service Organizations (consultancy agencies, training centres and banks) in Africa to enhance the capacity of the organizations within this programme. In 2010, local consultants were deployed at Sidama and ACPCU (see also above). An external consultant attended the meeting of the Fairtrade Network Africa (FTA) on Fair Trade Original’s behalf. 4.3 Collaboration with and coordination of development programmes in the regions Fair Trade Original and TWIN UK work closely together in Africa. The development and implementation of five Producer Partnership Plans were partly financed by the PSO Fund. New activities are harmonized, quarterly and visitors’ reports are exchanged, and the various coaches and consultants consult with each other. In 2010, regular consultations were held between the organizations involved on one or several programmes. These related, for example, to the harmonization of the development of the strategic plan for Sidama in Ethiopia with Agriterra and Cordaid: TWIN UK coordinated the actions that needed to be taken to improve the fair trade perfor-

Tanzanian coffee farmers bring their beans to the cooperative.

mance of the Kuapa Kokoo cocoa cooperative in Ghana. New insights The objective of the PSO programme was to learn from the experiences with capacity building acquired at all levels, i.e. by the farmers, trading partners, consultants and Fair Trade Original. New methods such as outcome mapping were tested in practice and refined as necessary, other work instruments were evaluated and developed further, and Fair Trade Original’s approach to partner enhancement was subjected to continual reviews of its effectiveness and efficiency and improved as necessary. The Institute of Social Studies used the data collected with the scope of the BFMS and EBA (see also page 48) to determine lessons learnt about the critical factors that determine the success or failure of capacity building and development trade. These factors were then used to cluster partners in various categories. One partner was to be selected from each category for the performance of a more in-depth study to be carried out in the future. However, in view of Fair Trade Original’s limited resources it is uncertain whether this will be assigned priority. Equip Worldwide, a consultancy bureau with a great deal of experience in development cooperation, carried out two effect studies at sugar producer organizations in Malawi and Mauritius in 2010. The most important recommendations from these studies related to the necessity of:

Fair Trade Original at the trading partners

• having a good insight into the context and chain of a production process; • building good relationships with the participants throughout the entire chain; • offering everyone in the chain an insight into relevant issues; • working closely with others to resolve the most important bottlenecks in the chain. These lessons were used in the reformulation of the Business Development Plan in cooperation with Kasinthula (Malawi) during a two-day workshop together with the Ilovu processor and TWIN. All the new insights will also be utilized during the implementation of the new plan in the coming years. Fair Trade Original, in cooperation with the players involved in the chains and the aforementioned organizations in Africa, is using the experiences acquired during this programme to develop a number of new programmes. One programme shall focus on the enhancement of the coffee chains in Ethiopia, Tanzania, Guatemala and Peru. A new fair trade fruit chain will also be developed in Africa.

Their fair trade development premium enabled sugar farmers in Malawi to lay electricity supplies in their village - which is beneficial to the entire community.

Fair Trade Original at the trading partners

Summary of Fair Trade Original’s trading partners in 2010 Afrika Trading partner

Country

Sidama Coffee*

Beginning of trading relationship 2006

Ethiopia

Kuapa Kokoo*

1993

Ghana

Kasinthula Cane Growers*

2005

Malawi

Mauritius Sugar Syndicate/Craft Aid* ACPCU* Eswatini Swazi Kitchen K.C.U.* K.N.C.U.*

1999

Programme

Purchasing via third parties

KLIMMMOPS

Coffee

1, 4

–

Cocoa

1, 4

–

Sugar

1, 4

–

M3, I, M2, O

Mauritius

Sugar

1, 4

–

K, M2, M3

2008 1996 1991 1988

Uganda Swaziland Tanzania Tanzania

Coffee Jam, sauces Coffee Coffee

1, 4 2 1, 4 1, 4

–

M2, M3 K, M3, P, I, M2, O M2 M2

Mufindi Tea Estate* Granor Passi* Turqle Trading*

2002 2006 1997

Tanzania South Africa South Africa

Tea Apple juice Culinary

1 2 1, 2

–

M3 M2, M3, S K, I, M1, M2, M3, P, S

Citrusdal Wines* Carmien Tea* Stellar Winery* uniWines*

1998 2005 2010 2010

South Africa South Africa South Africa South Africa

Wine Rooibos Wine Wine

2 1 2 2

– – – –

K, M2, M3, S K K, I, S I, S

1 = Change the World Branding (Ministry of Foreign Affairs) 2 = Change the World Drinking (ICCO) 3 = Food safety, quality & traceability in fair trade (Hivos) 4 = Capacity setup of African fair trade chains (PSO)

Supplies Fairtrade certified product

Product

J J J

This summary lists the trading partners with whom Fair Trade Original had a direct (trading) relationship in 2010. Some products in the range are purchased via third-parties, such as colleague fair trade organizations in Europe. The suppliers of these products are not listed in the summary. The letters in the KLIMMMOPS column refer to elements that received attention at the relevant partner during 2010: K = Quality L = Logistics I = Information M1 = Marketing M2 = Management M3 = Monitoring O = Organization P = Product development S = Social development

Latin America Trading partner

Country

La Riojana

Beginning of trading relationship 2009

Crisil

2001

El Ceibo*

1985

Acipar* Vinos Lautaro* Apicoop* ANAP/CPA Jose Marti* Conacado*

Fair Trade Original at the trading partners

Product

Programme

Direct purchasing

Purchasing via third parties

KLIMMMOPS

Argentina

Olive oil

–

Bolivia

Glassware

–

K, M1, M2, O, P

Bolivia

Cocoa

–

2004 1999 1997 1999 2007

Brazil Chile Chile Cuba Dominican Republic

Juice Wine Honey Juice Cocoa

–

I, M3, S K, M1, M2, P M1, M2 I, M2, O M2

CreArte

2001

Guatemala

Gifts

–

M1, M2, O, P

COPIASURO*

1991

Guatemala

Honey

–

K, M2, O

Fedecocagua*

1996

Guatemala

Coffee

–

Manos Campesinas* Unión Majomut*

1998 2005

Guatemala Mexico

Coffee Coffee

1 1

–

M2 M2

Cecocafen*

1997

Nicaragua

Coffee

–

Prodecoop*

1993

Nicaragua

Coffee

–

Manduvira* Allpa Cocla*

2007 1989 2002

Paraguay Peru Peru

Cane sugar Gifts Coffee

– 1 1

– J

–

I K, M1, O, P, S M2

Relationships terminated in 2010: Ruitersvlei, a wine supplier in South Africa, failed in its endeavours to supply fair trade certified wine. In addition, there were repeated problems with the quality. For these reasons Fair Trade Original decided to seek alternative South African wine suppliers. CAI Campesino, a Bolivia nuts supplier, encountered financial problems. Fair Trade Original was actively involved in the endeavours to achieve a restart. Nevertheless, and in spite of the efforts made by various parties, the cooperative was compelled to terminate its operations in 2010. Following disappointing coffee harvests in Colombia prices rose to unprecedented levels. As a result, Fair Trade Original was unable to continue to procure coffee from Coop. San Roque /Esperanza. The turnover generated by tea gift packs produced by Colombo Tea Blenders on Sri Lanka was too low to justify the continuation of the contact. The contraction of the gifts & living product range also resulted in the need to say farewell to two trading partners, Equitable Marketing Association in India and Mahaguthi in Nepal.

Asia Trading partner

Fair Trade Original at the trading partners

Beginning of trading relationship

Country

Product

Programme

Direct purchasing

Purchasing via third parties

KLIMMMOPS

Aarong

1986

Bangladesh

–

K, L, I, M3, P, S

Dhaka Handicrafts

1995

Bangladesh

Candles, interior decorations Baskets

–

K, L, I, M3, P, S

Preda Fair Trade Products

1985

Philippines

Mango

–

Chesna Organics/ Rajlakshmi* Conserve

2010 2008

India India

Textiles Bags, etc.

–

L, I, P

CRC Exports

1993

India

–

K, I, M1, M3, P,S

Eco Tasar Silk Sasha Exports

2008 1978

India India

Scarves, leather goods, etc. Scarves Accessories, gifts

1 1

–

K, M3, P L, I, M1, M3, P, S

TARA Projects FTCI Amdo Food Company

1974 1981 2001

India India India

Jewellery, gifts Bags Noodles

1 1

–

K, I, M1, P, S K, L, M2, P K, M1, M2, M3, P, S

Sunstar Overseas*

2007

India

Basmati Rice

–

United Niligiris Tea Estate* Pt. Teduh Mitra Utama Yak & Yeti Enterprises Ma’s Tropical Foods Y–Development Cooperation Samroiyod Food Corp.* Sang Arun Kasama Trading Progressive Farmers Association*

2004 1998 2004 1989 1989 2007 1998 2004 1996

India Indonesia Nepal Sri Lanka Thailand Thailand Thailand Thailand Thailand

Tea Gifts Silver, gifts Herbs, coconut milk Gifts Pineapple Pottery Pottery Rice

–

1 1 2 1 1 1

–

I K, I, M3, P, S K, I, M3, P, S K, M1, M3, P, S I, M3, P, S L, M2, M3, O, P K, L, M1, M2, M3, P M1, P M3, I

Mai Vietnamese Handicrafts

1992

Vietnam

Gifts

–

K, L, I, M3, O, P, S

New trading relationships in 2010: Stellar Winery and uniWines, of South Africa, became new wine suppliers. A new relationship began with India’s Chetna Organics cotton cooperative, which collaborates with the Rajlakshmi textile factory in Kolkata in the production of Fair Trade Original’s new Fair & Green textile collection.

Digitalization, fed by the African sun Development trade in practice African cooperatives are confronted with the challenge of digitalizing the existing data.

Fair Trade Original imports and trades coffee supplied by African farmer organizations with, on occasion, dozens or even nearly one hundred affiliated village cooperatives. These village cooperatives have in their turn a total of tens of thousands of individual members distributed over a wide area. Many coffee cooperatives lack information about the precise number of their members, the hectares allocated to the cultivation of coffee, the number of coffee shrubs, the yields per bush and per hectare, the quantity of coffee that will be produced and the quantity of coffee they will trade in the current year. However, they need this information for their planning, conclusion of contracts, and arrangements for advance financing, transparency and traceability. Although there are data, no usable information is available. The current records are usually handwritten, which does not invite further examination. For this reason the cooperatives are confronted with the challenge of digitalizing the existing data.

However, how can you digitalize information in villages that lack electricity and in regions where many people are unable to read or write and only a very small number of people can work with a computer? Fair Trade Original supported two African farmer organizations in their digitalization programme by providing hardware and software solutions, GPS and field training. The computer-unfriendly conditions - including high temperatures, high relative humidities, dust and lack of electricity resulted in the decision to search for dust-tight, rugged portable computers with a long battery life. This resulted in the selection of laptops which had originally been developed for schools. The six-hour battery life was prolonged by feeding the laptops used in the field with a power source that is available in abundance in Africa - the sun. The cooperativesâ&#x20AC;&#x2122; field staff who take the laptops with them into the mountains have rucksacks with integral solar panels that charge an extra battery in the rucksack. This extra energy, supplemented at night with

power from the mains in inhabited regions, enables the staff to work in the field throughout the day. As the laptops are equipped with touchscreens the field data can be entered very simply on the spot using the screens. The field staff are also equipped with GPS equipment to enable them to map the fields and measure the surface areas. They use Google Earth to plot the data. The lightweight applications are ideally suited to running databases on a laptop and, if so required, even from a USB stick. The information can be uploaded very easily once an Internet connection is available. The inventory at Ankole Coffee Producers Cooperative Union (ACPCU) in Uganda and Kagera Cooperative Union (KCU) in Tanzania was completed in 2010. The next step is to enter the data collected on the individual members into the central organizationâ&#x20AC;&#x2122;s system.

Fair Trade Original

Annual Accounts 2010

Contents Annual accounts Balance sheet at 31 December 2010 Profit and loss account for 2010 Cash flow statement Notes to the Annual Accounts 2010

73 74 75 76

Other information Allocation of the result Five-year financial summary

87 87

Annual accounts Balance sheet at 31 December 2010 (after allocation of result) 2010

2009

1 2

293,817 29,864 323,681

384,584 9,586 394,170

3 4 5 6 7

3,518,343 2,502,678 118,522 899,414 271,638 7,310,595

3,062,977 2,569,197 55,292 222,719 781,808 6,691,993

7,634,276

7,086,163

Note Fixed assets Tangible fixed assets Financial fixed assets Current assets Stock Trade accounts receivable Advance financing of producer organizations Other receivables and prepayments Liquid assets

Total Equity Other reserves

3,483,103

3,215,076

Provisions

369,169

510,949

Long-term debts Interest-free loan from Fair Trade Assistance

982,434

Short-term debts Trade accounts payable Taxation and social security charges Other debts and accruals

11 12

1,632,239 312,339 827,992 2,772,570

998,194 385,473 994,037 2,377,704

7,634,276

7,086,163

Total

Annual Accounts Fair Trade Original 2010

Profit and loss account for 2010 Note Gross margin Net turnover Cost of sales Other income

13 14 15

Income from subsidies Other Costs Personnel costs Depreciation Selling costs Accommodation costs General costs Other value adjustments to tangible fixed assets

16 17 18 19 20

Operating result before interest and taxation

2010

2009

18,594,256 13,314,189 5,280,067

17,806,968 12,570,984 5,235,984

1,702,315 152,552 1,854,867

2,073,953 32,915 2,106,868

2,757,159 167,612 2,610,887 314,083 974,848 (10,100) 6,814,489

2,737,797 171,750 2,591,524 315,361 1,211,324 3,253 7,031,009

320,445

311,843

Financial income and expenditure Operating result before taxation

11,157 331,602

6,756 318,599

Corporation tax Result after taxation

(63,575) 268,027

(67,727) 250,872

Annual Accounts Fair Trade Original 2010

Cash flow statement The cash flow statement recognizes the funds that became available during the year under review and their use. The cash flow from operational activities is determined using the indirect method.

Operational activities Result after taxation Depreciation and value adjustments to tangible fixed assets Movement in provisions Movement operating capital

Investment activities Investments in tangible fixed assets Income from the sale of tangible fixed assets Movement in financial fixed assets

Movement in liquid assets Liquid assets Balance of liquid assets at 1 January Balance of liquid assets at 31 December Movement in liquid assets

2010

2009

268,027 168,067 (114,780) (733,906) (412,592)

250,872 178,174 (364,825) 182,870 247,091

(82,025) 4,725 (20,278)

(69,707) 1,096 (148)

(97,578)

(68,759)

(510,170)

178,332

781,808 271,638

603,476 781,808

(510,170)

178,332

Annual Accounts Fair Trade Original 2010

Notes to the Annual Accounts 2010

nomic benefits will result from the settlement and the value can be measured reliably.

and underlying assumptions are subjected to continual reviews.

General

Income is recognized in the profit and loss account when an increase in future economic benefits related to an increase in an asset or a decrease of a liability has arisen that can be measured reliably. Expenditure is recognized in the profit and loss account when a decrease in future economic benefits related to a decrease in an asset or an increase of a liability has arisen that can be measured reliably.

Revised estimates are recognized in the period in which the estimates are revised and in later periods in which the revised estimates have an effect.

The financial data on pages 73 to 88 inclusive are derived from the consolidated Annual Accounts of the Fair Trade Original Foundation. KPMG Accountants has audited the consolidated Annual Accounts and issued an unqualified audit opinion. The consolidated Annual Accounts can be requested from Fair Trade Original via jaarverslag@fairtrade.nl. Standards followed in the preparation of these Annual Accounts The Annual Accounts were prepared in accordance to the statutory provisions laid down in Part 9, Book 2 of the Netherlands Civil Code. The accounting principles applied to the valuation of the assets and liabilities and determination of the result are based on historical costs. Accounting policies for the valuation of assets and liabilities and the determination of the result Assets and liabilities are recognized at nominal value unless otherwise stated. An asset is recognized in the balance sheet when it is probable that the future economic benefits will flow to the company and the value can be measured reliably. A liability is recognized in the balance sheet when it is probable that an outflow of resources embodying eco-

When a transaction results in the transfer of virtually all or all future economic benefits and of all or virtually all the risks relating to an asset or a liability to a third party then the asset or liability is no longer recognized in the balance sheet. Assets and liabilities are no longer recognized in the balance sheet from the time at which the conditions of the probability of future economic benefit and reliability of the measurement of the value are no longer met. Income and expenditure are allocated to the period to which they relate. Income is recognized when Fair Trade Original has transferred all significant risks associated with the merchandise to the buyer. When preparing the Annual Accounts the Management Board needs to make assessments, estimates and judgements that can exert an influence on the application of the principles and the reported value of assets and liabilities, income and expenditure. The actual results can differ from these estimates. The estimates

Principles for the conversion of foreign currency Transactions in foreign currency Transactions denominated in foreign currencies are converted into Euros at the prevailing exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currencies are converted into Euros at the prevailing rate on the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies that are recognized at historical cost are converted into Euros at the prevailing exchange rate on the transaction date. Exchange rate differences occurring on conversion are recognized as an expense in the profit and loss account. Financial instruments Financial instruments encompass investments in shares, trade and other receivables, liquid resources, loans and other financing commitments, trade debts, and other accounts payable. Financial instruments also encompass financial derivatives embodied in contracts. The company does not separate these derivatives from the basis contract and, consequently, they are recognized in accordance with the basis contract.

Financial instruments are recognized at fair value on initial recognition. When instruments are not valued at fair value with the recognition of value adjustments in the profit and loss account then any directly attributable transaction costs are included in the initial valuation. Following the initial recognition financial instruments are valued in the manner explained below. Financial instruments included in the trading portfolio Financial instruments (assets and liabilities) maintained for trading purposes are valued at fair value and movements in the fair value are recognized in the profit and loss account. During the first period of valuation directly attributable transaction costs are recognized as expenditure in the profit and losses account. Other liabilities Liabilities not included in a trading portfolio are valued at amortized cost on the basis of the effective interest method. Hedge accounting The company makes use of foreign exchange forward transactions to cover currency risks arising from purchase and sales transactions. The company applies cost hedge accounting to recognize the results from value adjustments of the foreign exchange forward transactions and the receivables or debt they cover simultaneously in the profit and loss account.

The application of cost hedge accounting results in the following exception to the financial instruments valuation principles referred to above. The initial valuation of foreign exchange forward transactions is at cost. The foreign exchange forward transaction is not revalued during the period in which the foreign exchange forward transaction is related to an expected future transaction. Once the covered position of the expected future transaction results in the recognition of a financial asset or a financial obligation then the profit or loss associated with the foreign exchange forward transaction is recognized in the profit and loss account in the period in which the asset that was acquired or the liability that was entered into exerts an influence on the profit or loss. The results from the non-effective part of the hedge relation are recognized in the profit and loss account. The coverage relation is terminated when a foreign exchange forward transaction no longer complies with the conditions for hedge accounting, matures or is sold. On termination the valuation principles applicable to the relevant contract no longer apply hedge accounting. Tangible fixed assets The tangible fixed assets are valued at purchase price less accumulated depreciation. Depreciation is calculated by applying fixed percentages to the purchase value based on the expected useful economic life and taking account of the expected residual value.

Annual Accounts Fair Trade Original 2010

The following percentages are applied: Alterations, furnishings, warehouse racks Inventory and fittings, coffee vending machines, ERP systems and floors Computer equipment Computer cabling

10% 20% 33,3% 14,3%

Financial fixed assets The financial fixed asset principles are included under the Financial instruments section. Impairment of assets Fixed assets with a long life need to be assessed for impairment when changes occur or circumstances arise that give cause to the presumption that the book value of an asset will not be recoverable in full. The feasibility of recovering the value of assets in use is determined by comparing the book value of the relevant asset with the estimated cash value of the future cash flows that are expected to be generated by the asset. When the book value of an asset is more than the estimated cash value of the future cash flows then impairment is recognized for the difference between the book value and the current value of the asset. Stock Merchandise is valued at acquisition price. The purchase price encompasses the purchase price and addi-

tional costs such as import duties, transport costs and other costs that can be attributed directly to the purchase of stock. Trading discounts, rebates and similar payments (to be received) relating to the purchase are deducted from the purchase price. The valuation of the stock takes account of any reduction in value at balance sheet date. Receivables The principles for the valuation of receivables are specified in the Financial instruments section. Provisions Facilities are valued either at the nominal value of the expenditure expected to be required to settle the liabilities and losses or at the cash value of the expenditure. A provision is included in the balance sheet in the event: • of a legally enforceable or factual obligation arising from an event in the past; and • a reliable estimate can be made; and • it is probable that an outflow of resources will result from the settlement. Personnel remuneration/pensions Fair Trade Original’s pension scheme is administered by the Stichting Pensioenfonds Zorg en Welzijn Pension Fund. The scheme administered by the Pension Fund can be regarded as a defined benefit scheme. Each year the Pension Fund’s Board sets the contribution to be paid in the coming year, as a result of which movements in the Pension Fund’s yield are charged to the employers affiliated with the Pension Fund by means of adjustments to their annual contributions to the Pension Fund.

The scheme is based on the principle that the pension charges to be settled during the accounting period are equal to the pension contributions due to the pension fund in that period. A liability is recognized for any contributions due that have not been settled on balance sheet date. When the contributions already paid on balance sheet date are in excess of the contributions due then an asset adjustment account is recognized to the extent that the Pension Fund will refund the excess or offset the excess against future contributions due. A provision is also recognized on balance sheet date for existing additional liabilities relating to the Pension Fund and the employees when it is probable that an outflow of resources will result from the settlement of those liabilities and the amount of the liabilities can be measured reliably. The existence of any additional liabilities is assessed on the basis of the administration agreement concluded with the Pension Fund, the pension agreement with the employees and any other (explicit or implicit) commitments to the employees. The provision is valued at the best estimate of the cash value of the amounts required to settle the liabilities on balance sheet date. A receivable is recognized in the event of a surplus at the Pension Fund on balance sheet date when the company can exercise control over the surplus, it is probable that the surplus will accrue to the company and the receivable can be measured reliably. Long-term debts The valuation of long-term debts is explained in the Financial instruments section.

Annual Accounts Fair Trade Original 2010

Short-term debts The valuation of short-term debts is explained in the Financial instruments section. Recognition of income Turnover is recognized solely when it is reasonably certain that future benefits will accrue to the company and these benefits can be measured reliably. The net turnover recognizes the gross income from the sale of goods delivered to third parties during the year under review less the discounts granted on those goods. The cost of sales is determined from the cost price of the goods that were supplied and recognized under net turnover. These costs also include any downward revaluation required due to the lower sales value of the stock on balance sheet date. Losses incurred due to unmarketable stock are recognized under the cost of sales. Government subsidies Subsidies to compensate costs incurred are systematically recognized as income in the profit and loss account during the same period in which those costs were incurred. Taxes Taxes comprise the profit tax payable and recoverable and deferred taxes in the accounting period. The taxes are recognized in the profit and loss account unless they relate to items recognized directly in equity, when the taxes are recognized in equity.

The tax payable and recoverable in the financial year is the forecast tax to be paid on the taxable profit in the financial year as calculated on the basis of tax rates enacted or substantially enacted at the balance sheet date and any adjustments to tax payable for previous years. A provision is formed for deferred taxes to cover temporary variances between the book value of assets and liabilities for the purposes of financial accounting and the book value of the items for tax purposes. Deferred tax credits are recognized solely when it is probable that future taxable profits will be available that can be allocated to the realization of the temporary variance. Deferred tax credits are reviewed on each balance sheet date and reduced to the extent that it is no longer probable that the corresponding tax benefit will be realized. Cash flow statement The cash flow statement is prepared on the basis of the indirect method. Cash flows in foreign currencies are converted into Euros using the average weighed conversion rates for the respective periods. Cash flows from financial derivatives recognized as fairvalue hedges or cash flow hedges are assigned to the same category as the cash flows from the balance sheet items that are covered. Cash flows from financial derivatives for which hedge accounting is no longer applied are assigned in accordance with the nature of the instrument as from the date on which hedge accounting was terminated.

Determination of fair value A number of principles and notes to the Groupâ&#x20AC;&#x2122;s Annual Accounts require the determination of the fair value of both financial and non-financial assets and liabilities. Fair values required for the valuation and provision of information are determined on the basis of the following methods. Any further information required about the principles for the determination of the fair value is stated in the specific section of these notes applicable to the respective asset or respective obligation. Financial assets The fair value of financial assets is determined on the basis of the closing price listed on the reporting date. The fair value of investments retained until their maturity is determined solely for the purposes of the provision of information. Trade and other accounts receivable The fair value of trade and other accounts receivable is estimated on the basis of the cash value of the future cash flows. Derivatives The fair value of foreign exchange forward transactions is based on the listed market price, when available. When a listed market price is unavailable then the fair value is estimated by calculating the present value, by discounting the expected cash flows at the current interest rates plus a surcharge for the relevant risks.

Annual Accounts Fair Trade Original 2010

Balance sheet 1

Tangible fixed assets

2 Alterations

Computer equipment

Inventory

Total

Balance at 1 January Investments and assets in development Divestments Balance of purchase price at 31 December 2010

799,879 4,116 803,995

911,153 61,333 (15,816) 956,670

414,787 16,576 (70,845) 360,518

2,125,819 82,025 (86,661) 2,121,183

Balance at 1 January Depreciation Divestments Reductions in value Balance of depreciation at 31 December 2010

690,353 27,558 717,911

665,374 129,651 (11,091) 783,934

385,508 10,858 (70,845) 325,521

1,741,235 168,067 (81,936) 1,827,366

86,084

172,736

34,997

293,817

Book value at 31 December 2010

Financial fixed assets

Loan to Cooperativa Campesina Apicola Valdivia 64 depository receipts for Triodosbank N.V. shares 25.96 depository receipts for Oikocredit Nederland shares

2010

2009

20,000

â&#x20AC;&#x201C;

4,672

4,473

5,192

5,113

29,864

9,586

In 2010, stock dividends resulted in the acquisition of one depository receipt for a Triodosbank N.V.share and 0.4 depository receipt for an Oikocredit Nederland share.

Current assets

Stock 2010

2009

642,019 287,234 261,877 201,404 104,329 9,244 1,114,898 2,621,005 (50,637) 2,570,368

299,249 224,535 191,711 147,322 116,295 6,194 1,047,393 2,032,699 (64,986) 1,967,713

Provision for unmarketability Total, Gifts & Living

362,354 262,231 222,208 70,988 917,781 (311,919) 605,862

449,105 339,985 378,942 104,957 1,272,989 (380,984) 892,005

Goods underway Packaging material Total stock at 31 December

298,763 43,350 3,518,343

145,072 58,187 3,062,977

Coffee and Food Coffee Confectionery Breakfast Alcoholic beverages Tea Complementary Other food Provision for unmarketability Total, Coffee and Food Gifts & Living Interior decorations Fashion Table accessories Stationery

Other receivables and prepayments

Trade accounts receivable 2010

2009

Dutch accounts receivable International accounts receivable

2,409,742 96,550

2,503,308 68,127

Subtotal, accounts receivable

2,506,292

2,571,435

Provision for doubtful debts

3,614 2,502,678

2,238 2,569,197

Annual Accounts Fair Trade Original 2010

Advance financing of trading partners

This amount receivable of € 118,522 relates to advance payments to trading partners in developing countries for future deliveries of Food and Gifts & Living products. A provision of € 13,000 (2009: € 6,000) has been deducted from the amount receivable.

Subsidies to be received Prepaid selling costs Security deposits Prepaid ICT costs Nationale Postcode Loterij contribution to programme costs Corporation tax Insurance premiums Interest Personnel costs Procurement costs Gas costs Other

2010

2009

700,650 56,520 28,789 26,634 15,000

84,972 9,180 28,114 34,563 -

14,635 8,950 8,034 3,066 1,154 35,982 899,414

8,756 13,705 7,417 12,181 3,239 20,592 222,719

Liquid assets

The cash at bank and in hand relates to the balance in bank accounts and cash resources. The cash at bank and hand is freely disposable unless otherwise stated.

Equity

Balance of other reserves at 1 January Result for the financial year Balance of other reserves at 31 December

2010

2009

3,215,076

2,964,204

268,027 3,483,103

250,872 3,215,076

A Social Plan was agreed with the trade unions prior to the reorganization implemented in July 2007. A provision has been formed for future commitments towards the staff who have left the organization or have been transferred. Fair Trade Original’s conditions of employment include a provision for a non-recurrent bonus to employees who have been in service with the organization for 12.5, 25 or 40 years. On the basis of the current workforce the current obligations extend to a nominal amount of € 84,000, whereby no account is taken of mortality risks.

Provisions

Long-term debts 2010

2009

245,073 67,096 84,000 396,169

325,140 96,808 89,000 510,948

Annual Accounts Fair Trade Original 2010

Short-term debts 11 Taxation, pension contributions and social security charges

Turnover tax Payroll tax, national insurance premiums and pension contributions Corporation tax

2010

2009

176,052 136,287

234,614 117,123

312,339

33,736 385,473

2010

2009

296,498

259,905

201,031 48,149 40,670 38,296 32,812 32,255

227,905 76,784 40,611 97,201 45,058 45,419

26,712 -

2,275 88,706

111,569 827,992

110,173 994,037

10 Interest-free loans Unoccupied real estate Social Plan Anniversary bonuses Balance of provisions at 31 December

As a result of the reorganization and the 2007 fire, part of the warehouses and offices in the leased premises at Beesdseweg 5 in Culemborg are no longer in use. It is firmly expected that the vacant areas will not be re-allocated to operational activities in the period before the expiry of the lease (on 31 December 2012). The cash value of the future rental obligations is recognized in the annual accounts as a provision inclusive of an increment for unavoidable accommodation costs. The lease paid relating to the vacant areas is deducted annually from the provision.

The interest-free loan of € 982,434 granted by the Fair Trade Assistance Foundation has been provided until 31 December 2020. This loan is based on the agreements reached with the tax authorities.

13 Other debts and accruals

Procurement costs, additional costs, licences and bonuses Personnel costs Logistics costs Issued gift vouchers Prepaid subsidies Selling costs Accountants and consultancy fees Goods invoices to be received Project costs for subsidized projects Other

Financial instruments The company makes use of various financial instruments for its normal operations which expose the company to market and/or credit risks. This relates to financial instruments which are recognized in the balance sheet and foreign exchange forward transactions and currency options that cover future transactions and cash flows. The company does not trade in these derivatives and has implemented procedures and a code of conduct to limit the scope of the credit risk associated with each counterparty or market. Any losses arising from a counterparty’s failure to pay amounts due to the company are limited to the market value of the respective instruments. The contract value or notional principal amounts of the financial instruments are solely an indication of the extent to which financial instruments of this nature are used: these are not an indication of the amount of the credit or market risks. The estimated market value and total contract value / notional principal amounts of the foreign exchange forward transactions and currency options at 31 December 2010 are listed in the following table: Estimated market value Foreign exchange forward transactions purchase in US dollars Total

Contract value /notional principal amounts

486,454

469,363

486,454

469,363

Commitments not included in the balance sheet An amount of € 157,035.00 is deposited in a blocked account with the Rabobank to serve as warranty for rents and as surety for risks related to foreign exchange forward transactions. The current lease commitments for the areas and rooms used at Fair Trade Original’s premises in Culemborg amount to a total of € 322,000. The lease commitments for company cars, maintenance contracts and out-tasking and photocopying equipment amount to approximately € 271,000. The continuing commitments arising from the logistics service agreement with Van Uden Logistics amount to € 269,000. This commitment relates to the lease of storage space and the work carried out by the customer service department. At year-end 2010 the commitments arising from current orders of merchandise amounted to € 1,472,000. Transactions with related parties Transactions with related parties are an issue in the event of a relationship between the company, its participating interests and members of their management boards or managers. No transactions with related parties have taken place.

Annual Accounts Fair Trade Original 2010

Profit and loss account 13. Net turnover

Food Coffee Gifts & Living Total

2010

2009

Actual in % of 2009

10,936,594 4,638,388 3,019,274 18,594,256

10,337,077 4,530,377 2,939,514 17,806,968

106% 102% 103% 104%

14 Gross margin 2010

% van turn-over

2009

% van turn-over

Food Coffee Gifts & Living

3,022,134 1,031,548 1,226,385

28% 3,095,811 22% 1,118,521 41% 1,021,652

30% 25% 35%

Total

5,280,067

28%

29%

5,235,984

Costs

15 Other income

Income from subsidies Nationale Postcode Loterij contribution to programme costs Other contributions to subsidized programmes Movement in the provision for the advance financing of trading partners Donations Total

Annual Accounts Fair Trade Original 2010

2010

2009

1,702,315 154,444

2,073,953 -

2,500

14,121

(7,000)

17,000

2,608 1,854,867

Personnel Consultants

Business travel

Other

Total

Subsidy

Own contribution

BuZa

Actual Budget Balance

921,000 921,000 -

317,352 418,833 (101,481)

118,667 215,000 (96,333)

635,702 338,500 297,202

1,992,721 1,893,333 99,388

1,420,000 1,420,000 -

572,721 473,333 99,388

ICCO

Actual Budget Balance

7,000 7,000 -

19,237 23,500 (4,263)

3,830 5,500 (1,670)

143 143

30,210 36,000 (5,790)

22,657 27,000 (4,343)

7,553 9,000 (1,447)

Hivos

Actual Budget Balance

15,000 15,000 -

16,635 16,940 (305)

5,899 7,060 (1,161)

37,534 39,000 (1,466)

PSO

Actual Budget Balance

149,765 187,300 (37,535)

66,950 65,027 1,923

1,376 26,578 (25,202)

218,091 278,905 (60,814)

222,124 278,905 (56,781)

(4,033) (4,033)

Total

Actual Budget Balance

943,000 943,000 -

502,989 646,573 (143,584)

195,346 292,587 (97,241)

637,221 365,078 272,143

2,278,556 2,247,238 31,318

1,702,315 1,764,905 (62,590)

576,241 482,333 93,908

1,794 2,106,868

A subsidy of € 1,420,000 was received from the Ministry of Foreign Affairs (‘BuZa’) within the scope of the Medefinancieringstelsel (‘Co-financing Scheme’, MFS) for the successful introduction and marketing of Food and Gifts & Living products from developing countries on the Dutch market. ICCO contributed € 22,658 to the Change the World Drinking Programme in 2010. This Programme is focused on the marketing of fruit juices and wines. Hivos’ contribution to the Food Safety, Quality & Traceability in Fair Trade Programme amounted to € 37,533. PSO financed the Capacity building of African Trade Chains Programme and contributed an amount of € 222,124 to this Programme in 2010. The Nationale Postcode Loterij (NPL) supported the Breakthrough of Fair Trade in the Netherlands Programme. Fair Trade Original is carrying out this Programme in cooperation with the Max Havelaar Foundation and the National Association of Workshops. The contribution to the Programme costs amounted to € 154,444 in 2010.

Financing

The costs incurred in the implementation of the aforementioned programme are recognized under the regular items in the profit and loss account. An amount of € 576,697 is recognized under general costs for the contracting of external consultants, travelling and accommodation expenses, and other costs incurred in implementing the programmes. An amount of € 705,898 is recognized as part of the selling costs. These costs are

comprised of the branding costs (€ 100,003), sales promotion (€ 452,751), travel and accommodation expenses (€ 3,203) and product development (€ 149,851). The costs incurred in the deployment of personnel, inclusive of an increment for indirect costs, amount to € 943,000.

17 Depreciation

Fair Trade Original receives advance payments from subsidizers for the performance of the subsidized programmes. The expenditure on these programmes is deducted from the amounts received.

Receivables (debt) at 1 January Advance payments received Interest to be paid on advances Expenditure Receivables (debt) at 31 December

BuZa

ICCO

Hivos

PSO

Total

710,000 9,350 1,420,000 700,650

(27,081) 22,657 (4,424)

84,972 128,000 37,534 (5,494)

(70,120) 180,383 222,124 (28,379)

(12,229) 1,018,383 9,350 1,702,315 662,353

The receivables and debts relating to subsidies are recognized under other receivables and other debts respectively. 16 Personnel costs

Salaries and contracting of personnel Pension contributions, social security charges and other levies Study and recruitment costs Addition to or release from provision for anniversary bonuses Other

Costs passed on to third parties Total

Annual Accounts Fair Trade Original 2010

2010

2009

2,210,518 459,448 27,339 (3,749) 80,453 2,774,009

2,199,839 424,174 32,712 8,000 91,635 2,756,360

16,850

18,563

2,757,159

2,737,797

De gemiddelde personeelsbezetting (excl. uitzendkrachten) in de verslagperiode bedraagt 42 voltijdse medewerkers (2009: 43).

Depreciation charges Result from disposal of tangible fixed assets due to fire and divestment Total

2010

2009

168,067 (455)

171,921 (171)

167,612

171,750

2010

2009

1,116,257 633,478 532,709 205,672

1,139,051 624,547 415,518 235,333

47,693 27,626

57,814 26,222

23,039

28,625

2,469 21,944 2,610,887

(2,217) 66,631 2,591,524

18 Selling costs

Logistics costs Promotion costs and materials Branding & Communication Packaging & product development Payment discounts Travelling and accommodation expenses Contributions to colleague fair trade organizations Provision for doubtful debts Other Total

19 Accommodation costs

Rent Maintenance and cleaning of buildings and inventory Gas, water and electricity Insurance premiums Property tax and other levies Release from provision for vacancy of real estate Total

2009

126,800 70,708

128,928 97,600

56,773 29,636 3,866 26,300

57,976 30,477 2,991 (2,611)

314,083

315,361

2010

2009

576,697 119,444 116,437

877,425 107,029 78,992

48,587 36,676

41,494 33,538

24,507

26,866

52,500 974,848

45,980 1,211,324

20 General costs

Costs of partner development ICT Accountants and consultancy fees Company cars Charges for post and telecommunications Purchase/maintenance of inventory and office supplies Other Total

Signed by the Supervisory Board and the Management Board

21 Financial income and expenditure 2010

Interest expenses Interest income Dividend receipts Balance of expenses less income

Annual Accounts Fair Trade Original 2010

2010

2009

(23,390) 34,217 330 11,157

(20,195) 26,760 191 6,756

Fair Trade Original has a current account credit facility with Fair Trade Assistance for the financing of the working capital. The agreed rate of interest is equal to the deposit rate of interest of the European Central Bank, increased by 2.75%. The rate of interest is set per quarter, whereby the rate of interest in the previous quarter is adopted for the next quarter. The interest is due per quarter. No security has been furnished. No use was made of the current account credit facility at 31 December 2010. In 2010, the average balance of the current account credit facility with Fair Trade Assistance was zero. The interest paid by Fair Trade Original amounted to € 12,995. 22 Corporation tax Fair Trade Original is levied 20% corporation tax on taxable profit to € 200,000. The rate above this amount is 25.5%. The final settlements of corporation tax returns have been issued for the years to 2009 inclusive.

Fair Trade Original has exercised the exemption as referred to in Article 2:383, Section 1, of the Netherlands Civil Code for the remuneration of members of the Management Board as any such statement could be traced back to one single natural person. None of the members of the Supervisory Board receive an emolument.

Culemborg, 22 April 2011

The Management Board Board

The Supervisory

M.F.J. Jansen

J. Schraverus

Other information Allocation of the result The net profit of â&#x201A;ŹÂ 268,027 has been credited to the other reserves. Five-year financial summary In thousands of euros 2006

2007

2008

2009

2010

Movement in turnover by product group Food Coffee Gifts & Living Complementary Net turnover (inclusive turnover bonuses)

7,178 6,221 4,440 451 18,290

7,653 5,906 3,639 66 17,264

9,156 3,043 3,053 39 15,291

10,337 4,463 2,939 68 17,807

10,937 4,579 3,019 59 18,594

Result Net turnover (inclusive turnover bonuses) Operating result before interest and taxation Result after taxation Cash flow (net result + depreciation)

18,290 (2,651) (2,324) (2,053)

17,264 1,025 837 1,093

15,291 1,725 1,520 1,802

17,807 312 251 426

18,594 320 268 436

Capital Total assets Equity

11,145 607

8,178 1,444

7,549 2,964

7,086 3,215

7,634 3,483

1,047 581 271

712 68 256

504 75 282

394 70 175

324 82 158

Fixed assets Balance sheet value Investments Depreciation

Annual Accounts Fair Trade Original 2010

Employees Number, year-average on the basis of fulltime employment Payroll, inclusive of social security charges and exclusive of temporary employees Ratios Gross margin as % of net turnover Operating costs (excl. depreciation) as % of net turnover Operating result before interest as % of net turnover Result after taxation as % of net turnover Return as % of average equity Turnover rate as % of net turnover Receivables turnover rate as % of net turnover Solvency (equity as % of total assets)

2006

2007

2008

2009

2010

99 4,753

69 3,657

44 2,335

43 2,507

42 2,646

36.0 50.9 (14.5) (12.7) (131.3)

33.0 50.2 5.9 4.8 81.6

32.4 41.2 11.3 9.9 69.0

29.4 38.5 1.8 1.4 8.1

28.4 35.8 1.7 1.5 4.2

3.7 4.1 5.5

3.6 4.3 17.7

3.0 5.9 39.3

3.0 7.3 45.4

4.0 7.3 45.8

Annual Accounts Fair Trade Original 2010

GRI Index GRI G3 Guidelines C-Level Page numbers

Reporting level (Full, Partial/ Not)

4, 11

5,6 & 11 – 14

11 11 14

F F F

14 67 – 69

F F

11 11, 28, 32, 33 14 14, 15 37

F F F F F

3.2 Date of most recent previous report 3.3 Reporting cycle (annual, biennial, etc.) 3.4 Contact point for questions regarding the report or its contents 3.5 Process for defining report content, including relevance, determining materiality and stakeholders 3.6/3.7 Boundary of the report (e.g., countries, subsidiaries, leased facilities, joint ventures, suppliers) 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations or other entities

7 7 7 7, 16 – 18 7 7

F F F F F F

Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations 3.10 Explanation of the effect of any re-statements of information provided in earlier reports

1. 1.1

Strategy and Analysis Statement from the Managing Director about the relevance of sustainability to the organization and its strategy 1.2 Description of key impacts, risks, and opportunities 2. Organizational Profile 2.1 Name of the organization 2.2 Primary brands, products, and/or services. 2.3 Operational structure of the organization, including main divisions, subsidiaries and joint ventures 2.4 Location of organization’s headquarters 2.5 Number of countries where the organization operates (specifically relevant to the sustainability issues covered in the report) 2.6 Nature of ownership and legal form 2.7 Markets served (geographic breakdown, sectors served, and types of customers/beneficiaries) 2.8 Scale of the reporting organization 2.9 Significant changes during the reporting period regarding size, structure, or ownership 2.10 Awards received in the reporting period Report Parameters 3. 3.1 Reporting period for information provided

3.9

Reason for non-reporting or Explanation of non-reporpartial reporting ting or partial reporting

First GRI report

Annual Accounts Fair Trade Original 2010

GRI G3 Guidelines C-Level Page numbers

3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report 3.12 GRI index 4. Governance, Commitments, and Engagement 4.1 Governance structure of the organization, including committees under the highest governance body 4.2 Indicate whether the Chair of the highest governance body is also an executive officer 4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independentand/or non-executive members 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body 4.8 Internally developed statements of mission or codes of conduct relevant to economic, environmental and social performance and the status of their implementation 4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organization subscribes 4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organizations 4.14 List of stakeholder groups engaged by the organization 4.15 Basis for identification and selection of stakeholders 5. Management approach and performance indicators Economic performance indicators DMA Economic aspects EC1 Direct economic value generated EC2 Financial implications and other risks and opportunities due to climate change

Reporting level (Full, Partial/ Not) N

Reason for non-reporting or Explanation of non-reporpartial reporting ting or partial reporting First GRI report

89 – 94 16 16 16

F F F

16, 43

18, 19 & 49 – 56 19, 20

16 – 18 16, 17

F F

23, 24 24 & 73 – 88

F F N

EC3 Coverage of the organization’s defined benefit plan obligations

EC4 Significant financial assistance received from government.

Information not available

Strategy with regard to environmental aspects is in development

Explanation of MFSprograms from page 57

Annual Accounts Fair Trade Original 2010

GRI G3 Guidelines C-Level Page numbers

Reason for non-reporting or Explanation of non-reporpartial reporting ting or partial reporting

25 â&#x20AC;&#x201C; 27

Reporting level (Full, Partial/ Not) F N F

Not material

45 â&#x20AC;&#x201C; 70

Environmental performance indicators DMA Environmental aspects

EN1 Materials used (by weight or volume)

Strategy with regard to environmental aspects in the chain is in development Information with regard to products is not available

39 39 39

N F F P

Only with regard to business in the Netherlands Only with regard to packaging materials Information not available

Not material

Rental property expires in 2012, later on more focus on energy saving building

EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation EC7 Procedures for local hiring and proportion of senior management hired from the local community EC8 Development and impact of infrastructure investments and services provided primarily for public benefit (through commercial, inkind or pro bono engagement)

EN2 EN3 EN4 EN5

Percentage of materials used that are recycled input materials Direct energy consumption by primary energy source Indirect energy consumption by primary source Energy saved due to improvements

EN8 Total water withdrawal by source EN11 Location and size of land owned, or adjacent to areas of high biodiversity EN12 Description of significant impacts of activities, products, and services on biodiversity EN16/EN17 Total direct and indirect greenhouse gas emissions by weight EN19/EN20 Air emissions (ozone-depleting substances, NO, SO) EN21 Water discharge EN22 Total weight of waste by type and disposal method EN23 Total number and volume of significant spills EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation

N N N N N N N N N

Not material Not material Not material Information not available Not material Not material Information not available Not material Not material

Annual Accounts Fair Trade Original 2010

GRI G3 Guidelines C-Level Page numbers

EN27 Percentage of products sold and their packaging materials that are reclaimed EN28 Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with environmental laws and regulations EN29 Significant environmental impacts of transporting products and materials used for the organizationâ&#x20AC;&#x2122;s

Reporting level (Full, Partial/ Not) P not applicable

Reason for non-reporting or Explanation of non-reporpartial reporting ting or partial reporting

Information partly available

41 42 42 41

F P P F N

Information not available

Research takes place

operations, and transporting members of the workforce Social performance indicators: labor practices Labor practices and decent work Total workforce by employment type, employment contract and region Total number and rate of employee turnover by age group, gender and region Percentage of employees covered by collective bargaining agreements Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements LA7 Rates of injury, occupational diseases, lost days, and absenteeism and number of workrelated fatalities by region LA8 Education, training, counseling, prevention and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases LA10 Average hours of training per year per employee by employee category DMA LA1 LA2 LA4 LA5

LA11 Programs for employees to improve their skills and knowledge LA12 Percentage of employees receiving regular performance and career development reviews LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity LA14 Ratio of basic salary of men to women by employee category

Information partly available Information partly available Not material

Not material

Information not specifically available

43 41 16, 42

F F F N

Information not specifically available

Legal deadlines

Annual Accounts Fair Trade Original 2010

GRI G3 Guidelines C-Level

Social performance indicators: human rights DMA Human rights HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken HR4 Total number of incidents of discrimination and actions taken HR5/HR6/HR7 Operations identified as having significant risk for (1) deprivation of the right to exercise freedom of association and collective bargaining, (2) child labor, (3) forced or compulsory labor, and actions taken to eliminate this Social performance indicators: society DMA Acting in society and community SO1 Nature, scope and effectiveness of any programs and practices with impact on communities SO2 Percentage and total number of business units analyzed for risks related to corruption

Page numbers

Reporting level (Full, Partial/ Not)

51 50 & 67 – 69

F P

50 & 67 – 69

50 – 52 & 67 – 69 51, 52

47 – 54 45 – 70

F F N

SO4 Actions taken in response to incidents of corruption

SO8 Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations

Not reported as such

Human rights are anchored in fair trade principles and working method

SO3 Percentage of employees trained in organization’s anti-corruption policies and procedures

SO5 Public policy positions and participation in public policy development and lobbying

Reason for non-reporting or Explanation of non-reporpartial reporting ting or partial reporting

not applicable

Information not specifically Monitoring on social available aspects takes place, anti-corruption policy is in development Information not specifically See SO2 available Information not specifically See SO2 available As a member of EFTA part of Fair Trade Advocacy Office

Annual Accounts Fair Trade Original 2010

GRI G3 Guidelines C-Level Page numbers

Reporting level (Full, Partial/ Not)

DMA Product responsibility PR1 Levenscyclus analyses waarin de gezondheid en veiligheid van producten wordt beoordeeld en het percentage producten dat onderworpen wordt aan dergelijke procedures PR3 Type of product and service information required by procedures PR4 Total number of incidents of non-compliance with regulations and voluntary codes PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction

30, 34 30, 34

F P

30, 34 37, 38

F not applicable P

PR6 Adherence to laws, standards and voluntary codes related to marketing communications (advertising, promotion and sponsorship) PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services

Reason for non-reporting or Explanation of non-reporpartial reporting ting or partial reporting

Social performance indicators: product responsibility

not applicable

Information not specifically available

Information with regard to customer satisfaction is not specifically available Not described as such

Complaints registration is ongoing Complaints registration is ongoing