Why Fairtrade?

Steenbergs is a fair trade business.  Being fair and ethical in our business dealings is core to who we are and what we do.  And Fairtrade gives Steenbergs the framework and discipline it needs to meet many of the social objectives of its ethical policy. 

While we accept that direct trade can be a suitable alternative, direct trade does not provide every stakeholder with an equal voice in shaping how commercial relationships are done, nor does it provide agreed standards against which businesses can be audited.

Since our establishment in 2003, we became registered with FLO-Cert GmbH and The Fairtrade Foundation to trade in and sell Fairtrade tea products from the outset and Steenbergs was the first UK business and one of the first 3 businesses in the world to be registered to trade in and sell Fairtrade spices and herbs.

Is An Ethical Policy Really Needed? 

A lot of our products come from the developing world, e.g. India, Madagascar and Sri Lanka. These farmers may be small enterprises, but they still operate in highly competitive commodity markets for their spices and teas.

Although international trade is good for the global economy, it can be really tough for these small businesses and their people. There is no comparable welfare state to provide many of the benefits we take for granted.

And trading terms are made difficult by the UK's relative economic strength compared to India, Madagascar and Sri Lanka; as a result, small changes to prices by consumers in the UK can be magnified for producers.

Pepper

In India, pepper is traditionally grown in smallholdings of 5 hectares. Many growers grow pepper intercropped with coconut, coffee and other spices, so annual production is around 1 tonne of black pepper per family.

These small producers face fluctuating pepper prices which have been on a downward trend in recent years - black pepper now is worth less than in 1990. This is a result of pricing pressure, coupled with increased exports from countries like Vietnam, which has grown its share of global trade from 0% to 37% since 1990.

Low prices have resulted in lack of investment as growers sell their crop below production cost. We estimate that the cost of sustainable production for black pepper is £1,645 where the market price is £1,115 per tonne. Constant pricing pressure is destroying these fragile rural economies, reducing environmental standards, health and education in parts of Kerala and elsewhere.

Tea

The tea market may be characterised by big plantations. However, small-scale planters grow around half of the tea in Nilgiri in Southern India, as well as in Sri Lanka and Kenya and are an important feature everywhere.

Tea is also dominated by large global brands - PG Tips, Tetley, Typhoo and Lipton - and the top 3 firms hold 60% of the UK market. Further, 90% of the Western tea trade is in the hands of 7 multinationals.

Since the late 1970s, tea prices have hardly changed, falling in real terms. Global oversupply of 7.5% of demand, coupled with changes to trade with Russia and Iraq, has resulted in prices today of approximately £1.00 per kg compared to £0.95 per kg in 1995 in open auction.

Only 15% of the retail price actually goes to the plantation with the rest earned in blending, packing and sales and marketing, most of which is done outside of the producer countries. In spite of the open market prices, many Indian plantations have to sell their tea at below production cost - so where 1kg of tea costs 95p to produce, the UK consumer often pays 65p to buy the same 1kg.

Poor economics causes reduced environmental and social welfare standards and, in some cases, plantations in India are just being abandoned. The Ethical Tea Partnership is a good step towards improving welfare on international tea estates, but the policing of workers' rights remains unenforceable in many areas nor does it seek to address the economic imbalances.

Can We Do Anything To Help? 

At Steenbergs, we think that our suppliers should make enough money from growing organic spices and tea to be able to improve their standards of living, as well as those of their workers and their families.

It is about being responsible in the way Steenbergs sources its products. We look for suppliers that are organic and provide:

  • A safe and clean working environment
  • A living wage to farmers and a minimum wage to workers
  • Dignified housing (including potable water and access to energy)
  • Basic rights for worker protection
  • Access to medical care for workers & their families
  • Access to primary and secondary education

Steenbergs enters into long-term relationships with its suppliers, paying them (100% in advance) a fair price for their organic pepper, organic tea or other organic spices - at prices determined by the grower itself - and wherever possible these are organic Fairtrade pepper, organic Fairtrade tea and organic Fairtrade spices.

What Is Fairtrade?

Fairtrade is an independent system of standards mainly targeting cash crops. Participating farmers get a fair price for their crops in return for meeting basic social welfare and environmental standards. Over 5 million farmers, workers and their families now benefit from Fairtrade.

When you pay that little bit extra for a Fairtrade product, that premium goes back to farmers and growers. They are guaranteed a stable price and one that is above the cost of production. This price allows farmers to earn a living wage, to plan for the future and to invest in sustainable business development.

For example, the price for organic teas is approximately £1.60 per kg and with the Fairtrade premium is £1.96 per kg. If a farmer doesn't sell Fairtrade, he will receive the price in the market - currently £1.00 per kg. During the last 10 years, the lowest price was 80p per kg. In addition with Fairtrade teas, a proportion goes directly to the community to spend as they see fit.

Steenbergs is mainly focused on higher grade gourmet teas, so pays prices significantly higher than these quoted prices, which are mainly for CTC and Fannings, ie tea-bag grade teas.

Isn't Ethical And Fair-trading Bad For Competitiveness?

Ethical trading and Fairtrade is not without its critics. Critics believe that guaranteed prices causes global oversupply in commodities and that a focus on small producers will result in a lack of competitiveness. But

  • The ethical trade market is insignificantly small - Fairtrade is 0.7% of the British tea market and 0.1% of the global market;
  • Demand for ethical and Fairtrade products is consumer-led. If consumers do not want to pay a little bit extra for an ethical product, they do not have to nor would these products would be made or bought;
  • In Europe, we have basic standards of social welfare, education, workers' rights and a minimum wage. It is difficult to deny similar benefits to the growers, workers and manufacturers of the products we buy.

WARNING: Steenbergs Ltd has become aware that an identity fraudster is falsely using the Steenbergs name and head office address to offer employment and business opportunities to unsuspecting people and businesses. The fraud originates in Nigeria and is in no manner connected to Steenbergs Ltd. There is no Garry Walker or pharmaceuticals or similar business at 6 Hallikeld Close. If you are in the UK, notify Action Fraud at 0300 123 2040.