A small coffee business, Harbour Roast, has found that some customers are concerned about the wages paid to coffee growers. The business can continue buying...
Question 1 Report
A small coffee business, Harbour Roast, has found that some customers are concerned about the wages paid to coffee growers. The business can continue buying cheaper beans through a trader, or buy certified Fairtrade beans directly from a co-operative. The owner wants ethical sourcing to support its objective of building a trusted brand, although the new beans will increase costs.
(a) Which one of the following groups is most likely to benefit directly from Fairtrade purchasing: shareholders, coffee growers, competitors or landlords? [1]
(b) Explain one reason why ethical sourcing could increase Harbour Roast's sales. [2]
(c) Identify one cost to the business of changing to certified coffee beans. [1]
Answer Details
(a) Coffee growers are most likely to benefit directly, because Fairtrade purchasing is intended to support producers through fairer trading conditions and payments. [1]
(b) Ethical sourcing can make customers see Harbour Roast as responsible and ethical. Customers concerned about grower wages may choose its coffee instead of rival products, increasing sales. [2]
(c) One cost is the higher purchase cost of certified coffee beans. Certification or auditing costs and staff-training costs are also valid. [1]
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