A Comparative Study of the Fair Trade Movement, Fair Labeling and the Rise of Ethical Consumption 2000-2011

Ethical consumption, as the deliberate buying or boycotting of certain goods or producers, has been rising tremendously in the last decade. The purchase of Fair Trade goods has been a prime example for this development, as such goods meet certain social standards to benefit small-scale producers in the global south. Existing research on ethical consumption either focuses strongly on microscopic explanations, referring to some motives, moral identities and resources for such behavior, or suggests some larger shifts, like processes of value change, globalization or rising affluence, to be of crucial importance. This paper takes another perspective focusing on the fair trade movement’s organizational efforts in creating a market for ethical consumption. I argue that by creating a new organizational form – product certification organizations – in the mid-nineties, a new market logic got introduced into the field, layering on the dominant civic coordination logic, embodied by the then dominant worldshop system. Yet, the introduction of labels alone cannot explain the high growth rates of Fair Trade in the last decade. Fair Trade labelling organizations used two strategies to promote ethical consumption. On the one hand they used classical framing strategies targeted toward consumers, with campaigning and education efforts as well as ordinary marketing. On the other hand, they targeted producers and retailers, lobbying them to start selling Fair Trade certified goods. It is this second strategy that especially helped the movement to thrive, as corporations have been used as a “transmission belt” in changing the consumer market by increasing availability and differentiation of Fair Trade products. These propositions are tested empirically using fixed-effects regression models for a unique panel data-set of aggregate per capita spending on fair traded goods across 21 countries for a 12 year time period. Controlling for value change, rising affluence, and changes in economic openness I find that both, the expenditure on campaigning, as well as the lobbying strategy have a statistical significant impact on the rise of fair trade consumption, also accounting for the time trend.