FAQ on Fair Trade

‘Fair’ – a much-used word – what does it actually mean?

In the context of ‘Fair Trade’, various terms have now become established:

‘Fair Trade’: ethical conduct in the exchange of goods – workers’ rights, tariffs, subsidies and, above all, fair treatment of business partners and producers.

‘Fair Trade’: the entire Fair Trade movement, including organisations and companies with other Fair Trade labels or without any certification at all – provided they meet the essential criteria, such as transforming conventional global trade and supporting producers.

‘Fairtrade’: the activities of Fairtrade International (FLO), the national Fairtrade organisations and the Fairtrade producer networks – a system that certifies products and traders in accordance with FLO standards.

What does Fairtrade mean?

The focus is on smallholder farmers and workers in the Global South, whose position on the world market is specifically strengthened. Only products that meet international Fairtrade standards are permitted to carry the Fairtrade mark. Key components:

A guaranteed minimum wage and support for improving living and working conditions.
Guaranteed fair prices that cover at least production costs and the minimum cost of living.
A ban on practices harmful to health, forced labour, discrimination and exploitative child labour.
A Fairtrade premium for social projects such as building wells, providing schooling or medical care.
Long-term trade relationships that make it easier for producers to plan for the future.
Support for the transition to organic farming, a premium for organic produce, and environmental standards that restrict or prohibit the use of pesticides, chemicals and genetically modified seeds.
Greater equality in international trade through dialogue, transparency and mutual respect.

The aim is responsible consumption that reduces poverty in the Global South. Currently, around 2 million farmers and workers in some 70 countries benefit from Fairtrade (source: Fairtrade International, Annual and Impact Report 2025/26, fairtrade.net).

Why do some products state that they are ‘fairly traded’ but do not carry the Fairtrade mark?

Some organisations have been campaigning for fair trade for many years – often longer than Fairtrade certification has even existed. In some cases, they also offer products for which there are no Fairtrade standards at all, such as handicrafts. ‘Fair trade’ or ‘fairly traded’ is not a protected term – so when such claims are made, it is always worth asking exactly what they are based on. The law was amended on 27 September 2026. Fair trade labels must be certified by an independent and expert third party, and there are many transparency requirements.

What is Fairtrade?

Fairtrade International (FLO) is the umbrella organisation for national Fairtrade organisations, founded in Bonn in 1997. The system consists of two branches: Fairtrade International develops the standards, whilst FLOCERT monitors compliance – ensuring that where it says ‘fair’ on the label, it really is ‘fair’ inside. Today, this includes three producer networks, 25 national Fairtrade organisations (Fairtrade Deutschland e. V. in Germany, the Max Havelaar Foundation in Switzerland, and Fairtrade Austria in Austria), Fairtrade International and FLOCERT.

According to the German Forum for Fair Trade, the Fairtrade mark is the best-known and one of the strictest quality marks in fair trade. Products certified include coffee, bananas, cotton, jewellery, timber, gold and cosmetics.

What exactly does Fairtrade do?

Fairtrade International is a non-governmental organisation that develops the standards and supports producer groups. All Fairtrade producers, workers, traders and companies that use the label must comply with the standards – as must other actors in the supply chain, such as importers, exporters and licence holders. On the ground, ‘liaison officers’ support producers by providing training, advice on certification and contact with traders.

What are Fairtrade standards?

Economy, ecology and social issues form the three pillars of the Fairtrade standards – the rules that all producers and traders must follow. They are developed by the Standards Department at Fairtrade International in collaboration with producers, traders and experts. They consist of mandatory core requirements for initial certification, as well as more comprehensive development indicators that must subsequently be met in stages.

Which components of FAIR SQUARED products are Fairtrade?

If a Fairtrade-certified version of an ingredient is available anywhere in the world – such as the valuable apricot kernel oil – we use it. Some cosmetic ingredients cannot yet be produced fairly and are therefore not included in the Fairtrade percentage stated on each product.

For ‘leave-on’ products, which remain on the skin, the Fairtrade content is at least 5 per cent; for ‘rinse-off’ products such as soaps, it is at least 2 per cent. At first glance, this might not sound particularly ‘fair’ – the reason being that water, which makes up as much as 90 per cent of many cosmetics, cannot, in principle, be traded fairly, yet it is included in the declared wet weight. If you factor this out, the average Fairtrade content of our cosmetics is over 35 per cent. The remaining percentage consists of natural ingredients that are not (yet) available as Fairtrade raw materials.

How are Fairtrade producers and traders audited?

Following initial certification, annual inspections take place, with a comprehensive recertification every three years. FLOCERT, Fairtrade International’s independent certification body, carries out on-site checks in over 115 countries to ensure that social, economic and environmental standards are being met – including the payment of the minimum price and premium.

Does the money actually reach the producers?

FAIR SQUARED sources all available ingredients from Fairtrade producers who are regularly monitored by FLO – including the minimum price and an additional premium to improve living conditions. This external monitoring is important so that consumers can be sure that the money really does reach its intended recipients: Unfortunately, there are also ‘fairwashers’ who advertise as ‘fair trade’ without any verifiable Fairtrade content. It is the official seal that builds trust here. We visit many of our producer partners in person and, after every trip, are always deeply impressed by just how much Fairtrade can transform living conditions.

Is fair trade really fair?

Given that there are various certification schemes and that fair trade is influenced by a dynamic global political landscape, this is a valid question. The most common criticisms – and our responses:

Producers incur certification costs even before a buyer is found. → For financially vulnerable co-operatives, the Fairtrade system has a fund that bridges this gap.
The Fairtrade licence fee (3 per cent for cosmetics) is calculated based on the final price, not the Fairtrade component. → Correct – in the case of cosmetics, this actually benefits the system, as the high water content cannot be sourced fairly anyway.
Farmers receive only a fraction of the Fairtrade premium. → Retailers in Europe demand a net margin of up to 40–60 per cent for distribution – but without the many retailers, Fairtrade farmers would not be able to sell as much at all. The spirit of fairness remains important here.
Migrant workers do not always benefit from the Fairtrade minimum wage. → This is a well-known gap in the system that is being addressed. To the best of our knowledge, this does not apply to our partner organisations.