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Fairtrade was going to save the world: now consumers fight to keep it going

When, in 2017, Sainsbury’s announced that it was planning to develop its own “fairly traded” mark, more than 100,000 people signed a petition condemning the move. Today, on the eve of Fairtrade Fortnight, the fact that most supermarkets have moved away from the standards developed by the Fairtrade Foundation is worrying.

While some grocery chains have sought the foundation’s stamp of approval, many have gone their own way. This means most consumers have little sense of which organisation is doing what to protect the wages and rights of developing world workers. Over the next two weeks, the foundation plans to focus its publicity efforts on cocoa farmers in west Africa and the way the Fairtrade mark can improve their lives.

Later this year, the base price of Fairtrade cocoa will increase by 20% from $2,000 a tonne to $2,400. The premium farmers put aside for community projects will also rise by 20%, from $200 to $240. This is great news for the farmers who are part of the scheme – and the higher price is easily within the pockets of chocolate lovers in the rich west.

It is a premium on today’s open market price, which stands at around $2,260 a tonne, and protects farmers from the drops in value that hit the industry in 2017, when it dipped below $2,000.

Yet the focus on cocoa reveals the limits of the Fairtrade system, which was once going to provide a popular alternative to most goods sold on the high street. There are standards for everything from cotton to gold and flowers, but such products are usually only available at specialist providers or the Co-op.

The foundation has tried to persuade some bulk buyers to buy marked goods only, and has had some success. For instance, Transport for London has made sure that the safety vests it provides to staff are made of Fairtrade cotton.

But more local authorities, government agencies and corporations need to follow this lead, ensuring that when they place orders in the thousands, it is always for a Fairtrade product.

Big businesses, with their large personnel departments, have the resources to explain to their workers why Fairtrade matters when they buy stuff, and what it means for those people at the other end of the production process.

But in other sectors, it is left to the Fairtrade Foundation to publicise its efforts and achievements – with the help of its most active members, such as Divine Chocolate.

That is a sad situation. After the great financial crash of 2008, a commodity boom that lasted from 2013 to 2017 turned into a slump that has robbed farmers and developing world governments of vital cash. Just as they were managing to stabilise their finances and set aside money to invest, the world price tumbled and wiped out their profit. Fairtrade practices protect farmers from this sort of setback and allow them to plan for the future.

Of course they have their critics. These are most mostly from the US – people who favour unfettered markets and seek to undermine the Fairtrade ideal, saying it is a form of protectionism that dampens innovation and ultimately ruins farms.

Theirs is an almost religious adherence to the free market that discounts the gains in stability and security that Fairtrade provides, and the scope of the community premium to promote universal education and the rights of women.

But without large employers making strides to adopt the standardised and transparent Fairtrade practices put forward by the foundation, it will be left to consumers to drive the project forward.

Read More – www.theguardian.com

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Sainsbury’s shares dive after Asda merger put in doubt

Sainsbury’s shares have dived 15% after the UK’s competition watchdog cast doubt on its plan to buy Asda.

Customers could see higher prices and less choice if the two grocers combined, the Competition and Markets Authority (CMA) said.

It said it could block the deal or force the sale of a large number of stores or even one of the brand names.

However, it also said it was “likely to be difficult” for the chains to “address the concerns”.

Sainsbury’s boss said the findings were “outrageous”.

In its provisional report on the proposed merger, the CMA also said the merger could lead to a “poorer shopping experience”.

Stuart McIntosh, chair of the CMA’s independent inquiry group, said it had found “very significant competition concerns in a number of areas – they are to do with grocery shopping in supermarkets, grocery shopping online and the companies’ petrol stations”.

“However, if one recognises that the competition concerns are quite broadly based… putting together a package of measures which addresses those concerns is likely to be complex and quite challenging,” he said.

But Sainsbury’s chief executive Mike Coupe described the CMA’s analysis as “fundamentally flawed” and said the firm would be making “very strong representations” to it about its “inaccuracy and lack of objectivity”.

“They have fundamentally moved the goalposts, changed the shape of the ball and chosen a different playing field,” he told the BBC.

“This is totally outrageous.”

 

Read More – www.bbc.co.uk

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Sainsbury’s says confidence in securing Asda has not changed

Sainsbury’s, Britain’s No. 2 supermarket chain, said its belief that the competition regulator would clear its 7.3 billion pound takeover of rival Asda had not diminished since the deal was announced in April.

“It (confidence) remains exactly the same…We remain confident in the case we are making to the CMA (Competition and Markets Authority),” Chief Executive Mike Coupe told reporters.

“In that respect nothing has changed,” he said.

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Retail mergers and acquisitions rise by 15% as businesses try to combat falling sales

The number of retail sector mergers and acquisitions has grown by 15 per cent in the last year as companies try to make up for struggling sales, a new study reveals.

Figures compiled by law firm RPC show there have been 37 retail mergers and acquisitions (M&A) deals in the year to 31 March, compared with 32 in 2016-17.

RPC said the recently announced Asda and Sainsbury’s merger was a good example of the recent trend for businesses in the food side of the retail sector to “add economies of scale to make up for slowing organic sales growth”.

Firms are also favouring M&A over flotations, due to weak demand from investors. Selling up to a competitor is seen as a more secure way for existing investors to exit a smaller retailer than an IPO which could be cancelled at any point “due to short-term volatility or poor sentiment towards the sector”.

“Through mergers such as Asda and Sainsbury’s, market leaders are looking beyond all the hype about the ‘meltdown of the high street’ and getting on with building breadth of offering and scale,” said RPC corporate partner Karen Hendy.

However, while the number of deals has jumped, the overall value of those transactions has fallen 16 per cent to £3.7bn, from £4.3bn the year before. Ms Hendy said: “It is important that sellers and creditors are sensible over the prices they are expecting from M&A deals in the current climate.”

Meanwhile, RPC said there is still interest in buying distressed retailers’ assets but buyers are looking for substantial discounts, and the number of retailers entering insolvency has risen by 7 per cent in the last year.

UK M&A deals announced in 2017-18 include:

  • The Co-op’s approach for Nisa, valued at £143m

  • Tesco Opticians’ acquisition by Vision Express owner Grandvision

  • Multiyork Furniture’s acquisition by DFS

Read More – https://www.independent.co.uk

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Retail Mergers and Acquisitions Rise by 15% as Businesses Try to Combat Falling Sales

The number of retail sector mergers and acquisitions has grown by 15 per cent in the last year as companies try to make up for struggling sales, a new study reveals.

Figures compiled by law firm RPC show there have been 37 retail mergers and acquisitions (M&A) deals in the year to 31 March, compared with 32 in 2016-17.

RPC said the recently announced Asda and Sainsbury’s merger was a good example of the recent trend for businesses in the food side of the retail sector to “add economies of scale to make up for slowing organic sales growth”.

Firms are also favouring M&A over flotations, due to weak demand from investors. Selling up to a competitor is seen as a more secure way for existing investors to exit a smaller retailer than an IPO which could be cancelled at any point “due to short-term volatility or poor sentiment towards the sector”.

“Through mergers such as Asda and Sainsbury’s, market leaders are looking beyond all the hype about the ‘meltdown of the high street’ and getting on with building breadth of offering and scale,” said RPC corporate partner Karen Hendy.

However, while the number of deals has jumped, the overall value of those transactions has fallen 16 per cent to £3.7bn, from £4.3bn the year before. Ms Hendy said: “It is important that sellers and creditors are sensible over the prices they are expecting from M&A deals in the current climate.”

Meanwhile, RPC said there is still interest in buying distressed retailers’ assets but buyers are looking for substantial discounts, and the number of retailers entering insolvency has risen by 7 per cent in the last year.

UK M&A deals announced in 2017-18 include:

  • The Co-op’s approach for Nisa, valued at £143m

  • Tesco Opticians’ acquisition by Vision Express owner Grandvision

  • Multiyork Furniture’s acquisition by DFS

Read More – www.independent.co.uk