April 7th, 2011
11:56 AM ET

A 'divine' fair trade policy for chocolate

In a previous post, CNN looked at the dark side of the chocolate business, but some chocolate companies are making every effort to use cocoa which is ethically produced.

CNN's Richard Quest talked to Sophi Tranchell, the managing director of Divine Chocolate, just one such company that's making that effort. Divine Chocolate is owned by cocoa farmers and puts the fair trade policy in practice.

Q: How does fair trade work in practice?

TRANCHELL: The way that fair trade works is that there's a guaranteed minimum price. So if the price gets below a certain level, then the fair trade price sets in. And there's also a fair trade social premium. And so that's the $200 a ton social premium. For every ton that we bought, we've paid an extra $200, which the farmers get to decide collectively and democratically how they spend that money.

And that's so there's a very distinct extra piece of money that they've got that they wouldn't have got from selling their cocoa on the open market.

Q: And how does that affect the price that you pay, the core price?

TRANCHELL: It is the world market negotiated price at the time, because cocoa is a traded commodity that changes all the time.

Q: So to clarify, the actual, if you like, fair trade element of this is the $200?

TRANCHELL: At the moment it is. But I've been working for Divine for 12 years and 12 years ago, the world market price was about $800 and the fair trade price was $1,600. So we were paying a lot above the world market price. So that the fair trade mechanism is a guaranteed minimum price to protect farmers from the real fall in the price of the market.

Q: But you'd agree it is a sort of a gerrymandering of the market in one respect, isn't it?

TRANCHELL: No, I don't think it is at all, actually. What we've done is build a consumer market for these products. So what we've done is - and which people thought was unlikely that we would manage to do - is get consumers to buy these products and to go out of their way to buy it and to pay a bit extra for it because they knew the farmers would benefit.

Q: But is there evidence that people make that distinction and say "This is fair trade chocolate" - people who are not necessarily a tofu-eating, sandal-wearing, tree-hugging lover, but just regular people who like good chocolate?

TRANCHELL: Obviously, there's loads of people who love Divine because it's fantastic chocolate and who'd go and buy it again because it's fantastic chocolate. But what we certainly saw when we started and we were a little tiny company starting in a very competitive market with lots of people who spend millions of pounds in advertising, we had a core group of people who were prepared to go into shops and actually ask for products that weren't there.

Q: How much do you involve yourself in the conditions under which the beans and the pods are actually grown, so that you know what's happening down in country?

TRANCHELL: So I think the thing that's important about Divine is that Kuapa Kokoo, the cooperative farmers in Ghana, actually own 45 percent of the company. And we buy all of our cocoa from those farmers. So those farmers are organized in a cooperative, which has a set of principles. And those principles are about empowering people and about improving people's livelihoods.

Q: But do you think there is still some skepticism about fair trade?

TRANCHELL: Yes, there's always going to be skeptics, aren't there? There are people who are skeptical. But what I can say is that from a Divine perspective, Divine uses cocoa from Kuapa Kokoo. I know what Kuapa Kokoo do. I've been there and seen it. The "Fair Trade" mark means that consumers can be assured of that proposition because it's been checked by independent people who've gone and checked that the money has got to the farmers and that the farmers are making a decision that their organization enables them make in a democratic way, which means the money is spent fairly and well.

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soundoff (50 Responses)
  1. seer

    While I applaud Fair Trade, it is only a step towards sustainability and can cause problems. For example in South America, Fair Trade Quinoa growing has caused the price to go up so much that the locals are starving and having to eat highly processed junk food (which for some reason always seems to be cheaper than local nutritious food... not sure why but it has something to do with corporate economic control.) Fair Trade is limited to the farmers and farming communities in its "circle of sustainability" and doesn't consider the bigger picture in the exporting country. Its much better than exploitation, but the monetary colonialism of western consumers always has an effect and unless it is done at even a higher level of planning with the help of corruption-free local and national governments, it is disruptive.

    April 7, 2011 at 12:32 pm | Reply
    • Skyler Daniel

      @seer That makes no sense. How can paying locals a better wage make them poorer?

      April 8, 2011 at 6:58 am | Reply
    • TQ73

      I agree. While Fair Trade is good in paper, in practice it causes its share of problems. During a tour of a coffee-growing cooperative in Costa Rica, the people were saying that, even though their practices were highly sustainable (i.e. they re-use as much of the waste as they can, aim towards organic farming, have very strict quality controls, etc), their European clients were pressuring them to be "Fair Trade Certified". This meant going through a very costly process (for example, they claimed that just the registration form cost several hundred -or thousand Euros, and that was just the first step!). Can anyone tell me how can a small group of farmers get the money to get that certification? And if they didn't, they would risk losing their European clients! I don't think this is fair. However, I understand this could be fair in cases where there are big companies acting as middle-men that would otherwise take advantage of poor farmers. But I think the greatest beneficiaries are those who "award' such certifications, given the ridiculously high costs of getting all the paperwork done.

      April 10, 2011 at 2:15 pm | Reply
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