Française des Jeux and Retailers

La Française des Jeux (FDJ) has confirmed the closure of its outlets in supermarkets whose opening had attracted the wrath of tobacconists. The withdrawal can be explained by "the changing economic environment."

It seems rather than lobbying tobacconists is more convincing than that of supermarkets. It is true that the tobacconists are already in trouble with the restrictions on tobacco. Rest now know where the interests of consumers?

The fair trade hypocrisy (2/2)

Last week, I had written about the fact that fair trade was not as equitable as it claims to be.
To review this article, please click on this link : http://retailcore-en.blogspot.com/2009/01/fair-trade-hypocrisy.html

Today I decided to approach fair trade by the retailers view. As you know it now, a product with the fair trade label is on average 10% more expensive than a traditional product. Moreover, these products are a growing success today. The retail sector needed to benefit from this occasion to make even more margins and profits.

Indeed, if the products resulting from fair trade are so well positioned in the departments in stores (approximately in middle height), it is because they are more expensive than the traditional products and especially because they bring back more margins. We should not seek further: increasing turnover and margins = increasing profits for retailers.

Distributors own brands (DOB) also try to benefit from this label. It is particularly the case of Monoprix and Casino, which are very present on this sector for all kinds of products. Let us take the example of the chocolate: Monoprix, Auchan, Champion, Carrefour and Casino have each of them chocolate with the label "Max Havelaar". Let us not seek hypocrisy further.

Unfortunately, one should not make us believe that the retailers worry about the margins of producers. It is of course a strategy to make even more profits. Moreover it is the goal of each company. So we cannot blame this.

The fair trade hypocrisy (1/2)

The press speaks more and more about fair trade: the products resulting from fair trade are new actors in the retailing sector. The products are more expensive than the products known as "traditional". But is this really in order to remunerate better the producers?

At the beginning, the fair trade starts from a good attention because it was created to remunerate better the producers so that they can continue to remain. But this idea will generate certain threats. Indeed, the low volume of production involves an increase in the transport costs because it is impossible to make sufficient economies of scale. Moreover, there are other costs compared to the traditional products like the costs of certification and communication.

It is noticed that the consumer is completely manipulated because when he buys a fair trade product, he pays a symbol; symbol which is approximately 10% more expensive than a traditional product. According to some studies of the French Agricultural Research for Developing countries (CIRAD), "the share of the price of a fair trade product which is allocated to the producer… is weaker than for traditional products".

Finally, we can wonder if either the consumer is not informed of this hypocrisy, or it knows it, but it wants to give itself a clear conscience.

Next week, I will give another view about the fair trade hypocrisy. This time it will be about the professionals of the retailing sector.