# CE2004070EN.01002601.xml

| 20.3.2004 | EN | Official Journal of the European Union | CE 70/26 |
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20.3.2004

EN

Official Journal of the European Union

CE 70/26

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(2004/C 70 E/028)

WRITTEN QUESTION P-3856/02

by Eija-Riitta Korhola (PPE-DE) to the Commission

(6 January 2003)

Subject:   Retail prices of fair-trade products

Subject:

Fair trade accounts for a relatively large share of consumption in Europe. In 1997 the turnover of fair-trade products was estimated at EUR 200-250 million. 11 % of European consumers buy such products, and surveys have revealed that there is very substantial demand for them.

The EU has already adopted fair-trade initiatives, and NGOs and organisations which award fair-trade status also do their bit. Projects are also funded in developing countries. In the field of legislation, the EU has implemented fair-trade principles using numerous instruments, for example measures under the EU's Generalised System of Tariff Preferences. Despite all these measures, fair-trade products still cost far more than normal products, at least in Finland.

How much support is provided for fair-trade products?

Does the Commission know how the retail prices of fair-trade products currently compare with those of normal products, and what are the biggest cost items which contribute to the formation of the retail prices of fair-trade products?

To what extent can national authorities influence these prices?

Answer given by Mr Lamy on behalf of the Commission

(24 January 2003)

(24 January 2003)

The increased attention on the part of the public towards fair trade products is the result, among other reasons, of the various awareness raising campaigns that have been organised at the national level, that the Community has co-financed on several occasions. Such co-financing of private initiatives is part of the limited financial support for activities relating to fair trade that the Commission has already provided to non-governmental organisations (NGOs) within the Union and to producer groups in developing countries. Other forms of support may exist at the national level, but the Commission does not monitor the total amount of such forms of support.

The Commission has never carried out any detailed study on the price-structure for fair trade products, as these are commercial decisions taken within the context of the relevant organisations and may, indeed, differ widely depending on the product and the source in question. It is, however, widely accepted that their retail prices are higher than those of other comparable non-fair trade products, due to the additional costs linked to their production and marketing, the commitment to pay above the market price for the commodities in question and the limited economies of scale that have been achieved so far.

As far as the possibilities that exist for the various national authorities to influence these prices, any such activity must remain coherent with the Union and international obligations of the Member States and of the Union. In the long run, however, only a sustained trend of increased demand for fair trade products by European consumers is likely to lead to large reductions in prices.

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