Steps to become a licensee


1) Ensure that there is a Fairtrade Standard for your product
The Fairtrade Labelling Organizations International (FLO) is responsible for setting Standards for the various agricultural raw materials that can be sourced as Fairtrade. (For Sports Balls, the Standards apply to the labour used in manufacturing.)
For any finished product that you wish to carry the FAIRTRADE Mark, please ensure that there is a Fairtrade Standard covering the raw ingredients used in your finished product. For more detailed information about the Standards, and for a full list of raw ingredients with Standards, please refer to the FLO website: http://www.fairtrade.net/standards.html. A full list is also available in Part Three of the Fairtrade Standards for UK Operators .
If the product is composite food, cotton, or cosmetic product (e.g. cake, cushion or shower gel), please refer to the requirements for composition in Part Four of the Fairtrade Standards for UK Operators .
Please discuss your requirements with the Commercial Relations team who will be able to guide you through the process to become a licensee (commercial@fairtrade.org.uk). We can assist you with sourcing Fairtrade ingredients through registered suppliers, or help your existing suppliers to become registered to trade in Fairtrade products.
The Fairtrade Foundation plays a leading role within the FLO network in developing new standards so as to enable a wider range of food and non-food products to carry the FAIRTRADE Mark. We welcome enquiries from companies that are interested in working with Fairtrade in any capacity.


2) Read and understand the Fairtrade Standards for UK Operators


3) Register with the Fairtrade Foundation
Does this section apply to you?
i. If you are a non-UK organisation wishing to produce Fairtrade raw ingredients, process Fairtrade raw ingredients, or trade in non-consumer ready, unfinished or Fairtrade products outside of the UK, you will need to register with FLO-CERT not the Fairtrade Foundation. Please visit the FLO-CERT website for more details:
http://www.flo-cert.net/flo-cert/index.php.
ii. If you are a retailer or a brand based in the UK, and wish to sell consumer-ready products carrying the FAIRTRADE Mark, please
click here to access our Licensee Application Service system (LASer) to register your interest and to start the process. A member of the Commercial team will contact you to discuss your requirements in further detail.
iii. If you are neither of the above (for example if you distribute branded goods, or if you wish to supply raw materials, ingredients or products as Fairtrade to companies who will sell them under their own branding), please contact the Commercial Relations team (commercial@fairtrade.org.uk) and we will advise you accordingly.


4) Next steps as a Licensee
If your application via LASer is successful, you will receive a Registration, Licensing and Certification Agreement which you will need to sign and return to us. This Licence Agreement will cover the products that you have approval to trade in, and that have permission to carry the FAIRTRADE Mark, once their packaging is approved. We will arrange for an initial audit of your company to assess compliance with the Fairtrade Standards for UK Operators , as described above.
Once you are a Licensee with the Fairtrade Foundation, you will be able to submit applications for product certification via the Licensee Application Service system (LASer). You will also be able to submit the artwork associated with these products via LASer. More information regarding the use of the FAIRTRADE Mark, is outlined in responsibility number 3 below.
Responsibilities as a Licensee
The below section summarises your responsibilities as a Licensee. Licensee responsibilities are fully defined in the Fairtrade Standards for UK Operators; please familiarise yourself with this document.


1) Applicable Costs
The Fairtrade Foundation is a registered charity, but aims to operate as a sustainable business. As such, the Fairtrade Labelling certification system is largely financed through fees paid by the final commercial operator in the supply chain, who pays a licence fee for use of the FAIRTRADE Mark on certified products. In the UK, the Fairtrade Foundation receives about 75% of its income from these fees and is responsible within the national market for:
• Certification - verifying that products are traded in accordance with Fairtrade standards
• Maintaining our relationships with our licensees, with retailers, with producers and other business partners
• Raising awareness of the Mark among consumers – now in excess of 70% awareness in the UK public
• Working with our partners in the international Fairtrade Labelling network to develop and review standards.
A proportion of licence fees is paid to FLO as the Foundation’s contribution to the costs of maintaining and developing the core services of the Fairtrade system (including Standards, producer certification and producer services). The contribution is based on the UK’s market share of total Fairtrade sales across the 21 labelling initiative members of FLO and, as one of the larger members, the Foundation is a major contributor to FLO, thereby directly supporting the farmers that we work with through the licence fee that we charge.
The fee system has been reviewed several times since the Mark was introduced in 1994 (most recently revised in 2008), and this arrangement has been found to be the most transparent, and simple to administer for both licensees and the Foundation. It has also enabled the Foundation to operate at one of the lowest fee levels of any country within the FLO system.
The Foundation’s policy on licence fees is to operate a system that is transparent and consistent, and that balances the need for the Foundation’s work to be adequately resourced with the objective of maximising opportunities for Fairtrade producer organisations. It is therefore important that the fee is set at a realistic level but that it does not act as a barrier to entry or a disincentive to increase sales.


2) Licence Fee Rates
These are fully detailed in Part Four of the Fairtrade Standards for UK Operators.
The licence fee is calculated on the Flow of Goods reports (detailing all sales and purchases) that licensees submit on a quarterly basis.
PLEASE NOTE: A minimum fee of £100 per quarter is applicable once a licensee has been trading for five quarters.
Annual sales of Fairtrade certified products
| Fee
|
On first £5 million of annual sales
| 1.7%
|
On incremental annual sales between £5 million and £10 million
| 1.6%
|
On incremental annual sales between £10 million and £20 million
| 1.3%
|
On incremental annual sales between £20 million and £40 million
| 0.09%
|
On incremental annual sales between £40 million and £80 million
| 0.06%
|
| On incremental annual sales between £80 million and £160 million | 0.04%
|
| On incremental annual sales over £160 million | 0.02%
|
For all Food and Cosmetics products:
The rates are charged on the wholesale value of licensed FAIRTRADE Mark products, as invoiced by the licensee to the retailer/food service outlet/end user.
For Cotton products:
RETAILERS: The rates are charges based on the purchase value from the supplier, i.e. the cost price.
WHOLESALERS: The rates are charged on the sales value to customers, i.e. what licensees invoice their end customers.
Cotton licensees who sell both retail and wholesale need to detail this breakdown in their Flow of Goods reports so that the licence fee can be calculated accurately.
Reduced Rates:
The Foundation offers licensees who, by applying the Mark to all products that they sell in categories covered by Fairtrade standards, demonstrate a significant and long-term commitment to Fairtrade, a reduction of 50% in the licence fee for use of the Mark. Please click here for further information.


3) Use of the FAIRTRADE Mark
The FAIRTRADE Mark is the exclusive property of Fairtrade Labelling Organizations (FLO) International and internationally registered as a trademark (EU no. 0026 06 994. UK national registrations no. 2477914. World Intellectual Property (WIPO) no. 806 431).
Guidelines for product packaging and promotional materialsAs a certification label, the FAIRTRADE Mark can be used only in direct relation to products that are certified in accordance with Fairtrade standards. The Mark can also be reproduced on printed promotional materials to encourage people to purchase Fairtrade certified products. In all cases, approval for the use of the Mark, word Fairtrade and messaging relating to Fairtrade will need to be approved by the FAIRTRADE Mark Management team prior to printing or publication.
Product packaging: 1. New product packaging artwork please submit via
LASer 2. Existing product with redesigned packaging artwork: Those licensees whose existing product information is not yet on LASer, please submit packaging artwork to
artwork@fairtrade.org.ukPromotional materials (including websites):
• Please submit all artwork to artwork@fairtrade.org.uk
Lead times:• Ensure three weeks lead time is built into your critical path from first submission to approval.
In order to apply the FAIRTRADE Mark correctly to your materials, you will need to follow the appropriate guidelines
•
Packaging Manual for companies that have a signed valid Licence Agreement with the Fairtade Foundation - please email
manuals@fairtrade.org.uk to request the relevant Packaging Manual by stating:
i. product category you are creating artwork for
ii. your company name
iii. contact details
iv. your company FLO-id.
•
The FAIRTRADE Mark is available to licensees as an Illustrator EPS, please e-mail artwork@fairtrade.org.uk or call 020 7440 7629 providing the above i-iv points.
•
Promotional Materials Manual This is currently being written and will be available during 2010. If you are a licensee wishing to create promotional materials, please download the
Campaigner and Supporter Promotional Materials Manual and refer to all sections except 13, 14 and 15.
The use of the term "Fairtrade" (one word) is reserved by the Fairtrade Foundation and Fairtrade family as a description of products and transactions involving products that meet international Fairtrade standards.
PLEASE NOTE: Artwork can only be approved by the FAIRTRADE Mark Management team for products that feature on a Fairtrade Foundation’s licensee’s product schedule. In addition artwork and use of the FAIRTRADE Mark or word Fairtrade is not approved unless you have received written confirmation from the FAIRTRADE Mark Management team.


4) Compliance with the Fairtrade Standards for UK Operators – Reporting, Audits and Product applications
All licensees are responsible for ensuring that they are compliant with the Fairtrade Standards for UK Operators. The Certification Team is able to provide guidance on the requirements of the Standards, including a self assessment questionnaire.
The Fairtrade Foundation monitors compliance with the Fairtrade Standards for UK Operators through assessment of Flow of Goods reports, product applications and physical audits. If a licensee is found non-compliant with the Standards at a physical audit, a non-compliance is raised giving the licensee a timeframe within which to rectify this.
Each licensee is required to:
• submit to the Foundation reports of their Fairtrade transactions, normally quarterly through
LASer.
• submit and update their product information in
LASer for approval prior to launching or changing any Fairtrade product.
• be available for physical audit against the Fairtrade Standards for UK Operators and correct any non-compliances found within the agreed timeframe.
The Fairtrade Foundation, FLO-CERT and other FLO Fairtrade Labelling Initiatives, where relevant, together ensure that Fairtrade Standards are followed at each step of the supply chain from the Fairtrade producer group (the farmer or hired labour organisation receiving the Fairtrade price and/or premium) though to the licensee responsible for applying the FAIRTRADE Mark to the consumer-ready product. To maintain the integrity of the Fairtrade system, any critical non-compliances with the Fairtrade Standards can result in suspension or termination of a company’s Fairtrade Licence Agreement.


5) Selling Fairtrade Certified Products Internationally
The licence to use the FAIRTRADE Mark is managed by different Fairtrade Labelling Initiatives in different countries, each of whom have an understanding of their own market. It is therefore important for any licensee to inform the Foundation in advance of any new market they wish to sell into. The Foundation can then, where required, review this with the appropriate Labelling Initiative on your behalf. Your packaging may also require some amendments too. Please contact the Certification team for more information,
licensing@fairtrade.org.uk