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Consumer label confusion?


Consumer label confusion? Professor Claire Hannibal, who is researching supply chain sustainability, looks at what lies behind the logos.

Few of us would argue with safe working conditions and fair wages as a basic human right, yet the number of high profile scandals involving well know high street brands and their questionable employment practices does not seem to be on the decline. 

As consumers, we are interested in how the everyday products we buy are produced and traded.  We want to make informed purchasing choices. 

Yet it is virtually impossible for us as consumers to know how our break-time banana or new cotton shirt have been produced, and by whom. 

We therefore rely on labels. 

A multitude of labels are present in our supermarkets and high street stores that aim to act as a signifier of, for example, ‘fair trade’ or ‘single origin’.  Whilst it can be seen as a positive development that we as consumers have information about the trading practices of the products in our weekly shopping trolley, it is also confusing.

Because there are so many different types of labels, it is difficult to understand what they mean. 

Look behind the label and there are important differences; some labels focus on assuring minimum pricing for commodity products such as coffee, tea and cocoa to farmers, others focus on biodiversity conservation and gender equity whilst others look at how products are sourced and shipped to our shelves.  As a consumer I find this confusing.  What am I buying? 

As a researcher I have seen how over the past five-10 years the increase in the number and type of product labels has resulted in what has become known as a ‘standards market’. 

Many labels are essentially competing to be adopted by big brands to ensure that their type of label is widely known and used.  Those who established the fair trade movement are critical of this development and see this ‘mainstreaming’ of fairly traded products as diluting the ethos of the movement.  There are also important questions about whether these big brands that are adopting the labels really reflect the ethos of fair trade.

For many labelling schemes an audit process is used to assure the fair trade credentials of various actors in the supply chain (e.g. farmers, distributors, retailers).  This audit process is usually conducted by an independent third party and it is interesting to note how it is usually the farmer that pays for the audit process. 

Once the audit is successfully completed, the label can be used.  This seems fairly clear and offers a degree of transparency as many audit reports or summaries are available on the websites of the labelling schemes. 

A rather worrying recent development has been a move from UK supermarkets away from using established labels and, in essence, the development of their ‘own brand’ of fair trade label.  Why, when there are so many established labels to choose from, would supermarkets do that?  I can only speculate, but would suspect that is related to a greater level of control and a clearer alignment between the label and the goals of the supermarket.

This development is currently a hotly contested topic at the Annual General Meetings of our high street supermarkets and many feel that this move is a dilution of fair trade standards, a threat to independence and the institution of a corporate rather than collaborative business model.

In my view this development is neither beneficial for those involved in the production of products or for us as consumers.  We need these labels to act as proxy measures for the trading practices that we are unable to see. 

Rather than the development of yet more labels, I would like to see a reduction in the number of labels and clear information about what such labels are representing.  These labels are so important to the livelihoods of many.  Rather than arguing about which label to use or developing new and different varieties, I would urge those with influence to focus on ensuring the principles of fair trade are truly embedded in today’s supply chains. 

Let us remember that in an ideal world we would need no label as fairly traded products will be the norm.  Rather than developing a multitude of labels my view is that our sole aim should be to have no need for any at all. 

Claire Hannibal is Professor of Operations Management at the University of Wolverhampton Business School and Head of the Management Research Centre.

She will give her inaugural lecture, Who Cares Wins? Examining Sustainability on the Supply Chain next month.

For more information please contact the Corporate Communications Team.

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