This rather confused blog from the Adam Smith Institute makes me wonder if they know how markets work (odd given that’s their specialism). By inclination ASI is suspicious of Fairtrade and talk as if it interferes with the market. But that’s daft. The Fairtrade mark is simply a brand and is managed as such. Building brands – be they Fairtrade, Nescafé or Kenco – is a perfectly legitimate way to compete in a free market.
It falls to consumers to decide whether to pay extra for a name or a warm feeling or less for a budget brand. The brand’s value is decided upon by the market. So Fairtrade manipulates the market by exactly the same mechanism – competition – employed by Nestlé with Nescafé. I wonder if the Adam Smith Institute would extend its criticism to them.