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Mr. Mark Lazarowicz (Edinburgh, North and Leith): I am obliged to my hon. Friend for agreeing to take an intervention, and I congratulate her on securing the debate. She has explained that the benefits of the initiatives that she describes not only apply to the chocolate producers but are potentially much wider. Will she join me in welcoming the fair trade fortnight between 4 and 17 March this year? Will she join me in urging Members of the House to support that fortnight in whatever way they can, and also in urging the Government to encourage Departments and the civil service to assist that welcome initiative?
Linda Gilroy: I thank my hon. Friend for that relevant intervention. I certainly urge hon. Members and everyone who has a part to play in encouraging fair trade to take part in that event. I am pleased to tell my hon. Friend that two of the cocoa growers, Mary and Comfort, will be coming to Britain during that fortnight. They will visit Plymouth to meet some of the Plymouth and South-West co-operators, and go down to the Eden project in Cornwall where there is a tropical house containing, of course, a cocoa plant. I understand, although I have not yet visited it myself, that attached to the plant is a plaque referring to this project.
As a means of achieving a more balanced trade relationship between north and south, this end-to-end stakeholding by the producers of the raw material has a lot to offer. Not only does it seem set fair to increase their profits, but through having a say in how the chocolate is produced and sold, they increase their knowledge of the fiercely competitive European and western chocolate markets. A quick look at the notes of guidance as to what is involved in growing and harvesting cocoa, which I saw for myself when I visited the farm of a woman grower, shows why a cocoa grower deserves a fairer share of each bite of chocolate that we eat. It takes patience and exposure to considerable danger to establish and grow the golden pods, and harvest them for market. Waiting five years and risking snakes, scorpions and tetanus is definitely worth more than a fair trade premium in my book.
Kuapa Kokoo can get its members a better deal on all their cocoa, but they particularly benefit when their cocoa is sold to Fairtrade companies. Fair trade guarantees the farmers a minimum price for their cocoa of £1,666 a tonne and £66 a sack. That minimum price is intended to cover at least the costs of production, providing the co-operative with some security. Fairtrade companies also guarantee long-term trading contracts to the farmers. By contrast, Kuapa Kokoo farmers earn only £600 a tonne and £37 a sack when they sell their cocoa to conventional companies in other countries, and are not guaranteed long-term trading contracts.
Fairtrade companies pay an extra premium or bonus of £100 a tonne or £6 a bag to be used for community projects such as the water wells that I described or new
toilets; it can also be given directly to the cocoa farmers to improve their income. When dealing with Fairtrade companies, the farmers are assured that the process for buying and selling produce is clear and fair. Unfortunately, although all its cocoa meets the required Fairtrade standard, Kuapa Kokoo can only sell a proportion of its cocoa, as little as 2 per cent., to Fairtrade companies because there is not yet enough demand. Only now are fairly traded chocolate bars becoming available in the shops on any scale.Large international companies dominate the chocolate market in the UK, which is worth £4 billion; the European chocolate market is worth £14 billion, so it is a big market. Taken together, familiar names such as Cadbury, Mars, Nestlé, Suchard and Jacobs account for well over 80 per cent. of the retail market in chocolate confectionery. Competition between them ensures that their products remain innovative, strongly promoted and keenly priced, making it difficult for smaller companies such as Day to compete. Nevertheless, The Day Chocolate Company is doing well in integrating its product into the mainstream market. The Dubble chocolate bar is priced evenly with other similar products at 35p; the Divine chocolate bar is priced only slightly higher than comparable chocolate bars. At £1.19, Divine's newest product, Darkly Divine, with a substantially larger proportion of cocoa in the ingredients, will also be competitively priced. Because of the competitiveness of the western and European chocolate market, it is difficult for Day to maintain low prices and still return as much profit to the cocoa growers as it would like. The company is only now set to go into profit.
Despite the success achieved through advertising campaigns, competitive pricing and so on, Day still faces obstacles to assisting Kuapa Kokoo and furthering the objectives of fair trade. Certain trade tariffs make it difficult for Day to break into the western chocolate market while maintaining fair trade relations and facilitating the involvement of Kuapa Kokoo at all levels of production. Developed countries tend to maintain much higher tariffs on imports of processed commodities than of raw materials. It is therefore much easier for Ghanaians to sell cocoa to Europe than chocolate bars; in the European market, there is no tariff on cocoa, but the duty on chocolate can be as high as 27 per cent. If that tariff were reduced or removed, Day could undertake more processing of the product in Ghana, allowing the producers to be more involved and to gain more profits. Another impediment to Day's efforts to facilitate fair trade is the import duty on sugar. At present, it is not feasible for The Day Chocolate Company to use fairly traded sugar in its chocolate and bring out a mainstream-priced product. With the reduction of that tariff, Day could count fairly traded sugar, along with fairly traded cocoa, among the ingredients in its products.
I pay tribute to my hon. Friend the Under-Secretary of State for International Development. I am pleased that my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner) has attended the debate, because it was with his help as Chairman of the Catering Committee that we managed to get those products into the House of Commons Tea Room, the Terrace Cafeteria and Portcullis House. I also pay tribute to the Minister and his colleagues for the Department's support for fair trade in general and the work of The Day Chocolate Company and the Kuapa Kokoo project.
I have a small shopping list to which I hope the Minister will respond. Fair trade arrangements are still very small in relation to such markets and I hope that he can report on positive progress from the recent Doha talks that will not only help the cocoa trade, especially in Ghana, to thrive, but will also help fair trade arrangements in general to prosper. In particular, I would welcome his comments on the chocolate tariff and the sugar duty. I hope that he will join me in recognising the value of this special project.
The company's slogan is "Pa Paa Pa", which is Twi for "Best of the best". I believe that the Kuapa Kokoo project is unique in terms of the way in which developing world producers can not only receive a fair and ethical treatment from buyers of the raw material, but have a stakeholding in the manufacture of the end product. I hope that the Minister will join me in recognising the value of the project not only in its own right, but perhaps also as a model for building a better relationship with traders in developing world countries, to whom we certainly need to give extra consideration in the wake of 11 September and if the aspirations in the plan for Africa are to be met.
Finally, I hope that in responding positively to my shopping list, the Minister will make Divine chocolate a regular feature of his own.
5.56 pm
Valerie Davey (Bristol, West): I warmly congratulate my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) on securing this debate and on highlighting the importance of fair trade. I echo the request of my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz) with regard to bringing to the attention of the House the forthcoming fair trade fortnight, in which I am sure that many hon. Members—and I hope the Minister—will be actively engaged.
I assure my hon. Friend that Bristol is indeed a divine city. It is a wonderful city, but it is quite specifically a Divine chocolate city. It is one of those cities to which The Day Chocolate Company came to launch its product—something about which I shall speak further in a moment. The city encourages fair trade in many ways, but I should like to mention two aspects that illustrate the importance of specific projects. The community of Bishopston in Bristol is linked to Kuppam in India. That community link or twinning arrangement has brought about the establishment of a shop on the Gloucester road where a wide range of Indian textiles and colourful clothing is now available. Also, one of the Oxfam shops in Bristol is designated for fair trade. A large variety of fair trade goods is available in that shop.
I think that the momentum of what my hon. Friend said relates to the importance of getting fair trade produce—in this case, the produce of The Day Chocolate Company—into the mainstream market, so that we can go into our shops and into the supermarket and pick up this most wonderful product. I have been introduced only today to the Darkly Divine chocolate bar. I hope that my hon. Friend the Member for Wolverhampton, South-East (Mr. Turner), the Chairman of the Catering Committee, will recognise it as an addition to the products sold in Portcullis House and the other outlets in the Palace, and as the company's dark chocolate brand. We hope that all the products will be more widely accessible, as that is the only way in which the wider public will recognise the importance and value of fair trade.
Let me turn briefly to the launch in Bristol. The Day Chocolate Company held the event at the Hotel Du Vin, which is now well known in Bristol and is newly established in a very old building—the old sugar house. As one enters the building, one is reminded that, in the olden days, looking out through the archway, one would have seen the masts of the ships coming into Bristol with sugar, which prompts thoughts of the unfair trade on the basis of which we are conscious—perhaps now more than ever—that our city developed. That unfair trade was in sugar and slavery. It was poignant to be able to launch Divine chocolate—a fairly traded product—there, knowing that the cocoa growers were part of the company's management. It felt as if things had come full circle, from unfair to fair trade.
An increasing number of people in the country are aware that that is the way forward. Working with partners throughout the world to establish fair trade, whereby growers, producers, conveyors and buyers are part of something that works to our mutual benefit, is at the core of what my hon. Friend the Member for Plymouth, Sutton and those in The Day Chocolate Company stand for. I respectfully suggest that the Minister and the Department also think along those lines. I look forward to his response to the debate.
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