Polls / July 20, 2010

How much extra would you pay for "fair trade" coffee?

The majority of respondents (57%) to the latest eZonomics online poll are willing to pay at least 5% more for "fair trade" coffee. About four in ten (44%) would not pay any extra for a fair trade cuppa.

People pay more to get more
It may sound obvious but people generally pay more for something when they get more. In the case of fair trade coffee, the customer gets coffee plus assurance it was grown in a responsible manner and that the coffee grower received a fair price.
The 57% of poll respondents willing to pay more for a fair trade brew are likely to consider that fair trade brands have added value.

Buying fair trade may support the retailer as well as the coffee grower
Economist Tim Harford, a Financial Times columnist, addressed the price of fair trade coffee his book The Undercover Economist and on his website of the same name. Harford claimed it may cost cafes very little extra to buy fair trade coffee - but that some charged a substantial mark up.
He wrote for Business Life magazine last year: "When a coffee shop charges ten pence extra for a Fair Trade cappuccino, the grower gets his due, but most of the mark-up is profit for the shop."
Since Harford launched his campaign about a decade ago several coffee chains have stopped charging more for fair trade coffee.
Consumer news website thisismoney referred to Harford's writing under the heading "fair trade coffee anomaly" when it advised to "buy basic fair trade coffee from a coffee bar in a quiet location to get the best value".

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eZonomics team
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