Proceedings of the International Association for Business and Society

Volume 24, 2013

Proceedings of the Twenty-Fourth Annual Meeting

The Dark Side of Fairtrade© in BOP Markets
Critical Perspectives and a Case Study

Fairtrade-certified products are sold through retailers to consumers who are willing to pay a premium in exchange for assurances that products were produced under acceptable working and environmental conditions, and that farmers were paid a fair market price. While touted as a positive social innovation, the Fairtrade movement has invited critical scrutiny and in its wake, suggestions for improvements in terms of sustainability, transparency, and tangible benefits for producers subsisting in Base of Pyramid (BOP) markets. In this paper, we uncover the debate swirling around Fairtrade and stipulate as to the theoretical reasoning for why the system should work and why it can fail. Focusing on the coffee industry, a case study of a socially responsible coffee roaster in Kansas City illustrates one of the alternative business models we discuss that seeks to solve the same problems addressed through Fairtrade, albeit through different producer-buyer relationships.