Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/191910
Authors: 
Naegele, Helene
Year of Publication: 
2019
Series/Report no.: 
DIW Discussion Papers 1783
Abstract: 
Fairtrade certification aims at transferring wealth from the consumer to the farmer; however, coffee passes through many hands before reaching final consumers. Bringing together retail, wholesale, and stock market data, this study estimates how much more consumers are paying for Fairtrade-certified coffee in US supermarkets and finds estimates around $1 per lb. I then assess how this price premium is split between the different stages of the value chain: most of the premium goes to the roaster's profit margin, while the retailer surprisingly makes smaller absolute profits on Fairtrade-certified coffee, compared to conventional coffee. The coffee farmer receives about a fifth of the price premium paid by the consumer, but it is unclear how much of this (quantity-dependent) benefit goes toward the payment of (quantity-independent) license fees.
Subjects: 
Coffee
Fairtrade
Price premium
Value chain
Voluntary sustainability standards
JEL: 
L15
L31
L66
O13
Q01
Document Type: 
Working Paper
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