Could Nestlé’s reputation undermine the credibility of the fair trade movement?

Last year Nestlé got into the fair trade coffee business, and now they are buying into fair trade chocolate.

An article in the UK’s Guardian newspaper raises an important question: Will Nestlé’s reputation cast a shadow over the goodwill people feel towards fair trade?

In other words, could fair trade coffee suffer by association?

Here’s an excerpt from that article:

The Swiss company has long been a target of campaign groups and the L'Oréal acquisition of Body Shop, which is expected to be approved by regulators on Wednesday, has brought the Swiss multinational into the spotlight again. A call to boycott all the company's products began almost 30 years ago, because of the way it markets its baby-milk formula in developing countries, and there are protest groups in 20 countries.

Now experts in ethical trading are watching how Nestlé will use its muscle in the fair-trade chocolate sector. A Nestlé spokeswoman said it had no plans to bring out its own fair-trade chocolate products.

There are also fears that Nestlé's reputation may affect sales of Divine. The Day Chocolate Company itself does not know what to expect from its new shareholder. "We are seeking clarification on our position," said a spokeswoman for Day. The Co-operative Group, Day's largest customer, would not comment on the implications until L'Oréal completed its acquisition of Body Shop.