Nestlé defies boycotters and 'ethical shoppers' by launching its own Fair Trade coffee brand

In a link with the Fair Trade Foundation, the Swiss food firm announced it will become the first of the big four coffee roasters to agree a "fair price" for farmers who are put into poverty by a glut of coffee on international markets.

The move by Nestlé, the world's biggest food and drink company, has caused a row among aid and trade workers over whether multi-nationals with controversial records should be given the "Fair Trade" seal of approval. Under Fair Trade rules, farmers and growers of everything from tea to pineapples are paid a "fair price" guaranteed higher than that on world markets.

But despite Nestlé's adoption of Fair Trade - which will be backed by a £1m advertising campaign - the company will still buy almost all of its coffee at the prevailing, low world price.

The price of coffee has slumped so much in the past six years that the 25 million coffee smallholders around the world have been left on the edge of survival, many too poor to afford medicine or to send children to school.

According to an independent poll last month, Nestlé is the most boycotted product in the UK on the back of its globally criticised "aggressive" marketing of baby milk in Africa. Campaigners and charities claimed yesterday that the company was seeking to present itself to increasingly informed consumers in a better light and to manoeuvre itself into the booming Fair Trade market.

Displaying prominent claims about its social, economic and environmental good, Partners' Blend will sell for £2.69 for a 100g tin, 40p more than Nescafé Gold Blend.

Consumers wondering whether to buy it will become participants in the growing politicisation of shopping. Over the past decade, consumers have been faced with an array of ethical decisions every time they enter a shop.

Do they buy Fair Trade bananas that give the farmers a better deal or organic bananas that are better for the environment and for themselves? Or do they buy the cheapest supermarket bananas that are priced low to take custom from smaller shops?

Then there is the issue of "food miles" - the harmful air pollution generated by jets flying in fresh produce from across the globe to feed the all-year-round demand for out-of-season fruit and vegetables.

The arabica beans for Partners' Blend will come from five co-operatives of small farmers in El Salvador and Ethiopia. Instead of receiving the market price of about 25p a kilo, they will get 33p a kilo - though that is still only a tiny fraction of the shop price.

The Fair Trade Foundation said that Nestlé's move would put pressure on the other big coffee roasters - Kraft, Procter & Gamble and Sara Lee - to adopt Fair Trade practices.

"This is a turning point for us and for the coffee growers," said Harriet Lamb, director of the Fair Trade Foundation. "It's also a turning point for the many people who support Fairtrade and have been pressing the major companies to offer Fair Trade coffees."

Nestlé acknowledged there were strong commercial reasons driving its entry into the Fair Trade market, which has expanded from three products in 1994 to more than 1,000 now. Sales are growing at about 40 per cent a year.

Nestlé's UK head of beverages, Fiona Kendrick, said: "Fair Trade is quite clearly growing enormously in terms of its awareness. Specifically in terms of coffee Fair Trade is 3 per cent of the instant market and has been growing at good double-digit growth and continues to grow."

Patti Rundall, the policy director at Baby Milk Action, which co-ordinates the international Nestlé boycott, damned Fair Trade for agreeing the deal. "To give a Fair Trade mark to a company whose baby food trade systematically violates child rights on such a massive scale makes an absolute mockery of what the public believes the Fair T rade mark stands for."

Amy Barry, the trade spokeswoman for Oxfam - a member of the Fair Trade Foundation - said Nestlé's move was "a very small step" in the right direction.

"We would welcome it, but with very big caveats," she commented. "There is an enormous amount more that Nestlé and the other major coffee roasters need to do to address the crisis facing the world's coffee farmers.

"There is a global oversupply which means prices are either low or very unstable. Four major roasters dominate the industry and they are pretty much able to dictate the prices and conditions the farmers sell at.

"Nestlé should guarantee all producers a fair price not just the lucky few who get on a Fair Trade scheme."

Louise Richards, the chief executive of the poverty charity War on Want, also issued a caveat, saying: "The fact that one Nestlé product qualifies for the Fair Trade mark in no way gives the whole company a clean bill of health."

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