Price Fairness: Two-Stage Comparison of Conventional and Fairtrade Prices

Besides theoretical considerations of price fairness, the article compares food prices—fairtrade and conventional. The first stage comparison of fairtrade and conventional producer prices reveals that fairtrade producer prices are twice as high as the conventionally traded equivalent. On the second stage, prices are compared on producer and consumer level for three products. The analysis predicts a massive price markup in retail. Sometimes fairtrade retail prices are higher than retail prices for their conventional counterparts, even though price differences have not been all that great for producers. This may be justified by a lower trading volume of the niche market, implicitly entailing higher costs.