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In turnabout, P&G now selling fair-trade coffee

Associated Press
September 15, 2003
John Nolan, Associated Press Writer
(09-15) 15:02 PDT CINCINNATI (AP) -- Bowing to pressure from activists, Procter & Gamble Co. on Monday began selling a line of "fair-trade" coffee, a more expensive variety intended to return more profits to growers.

The Cincinnati-based company's Mountain Moonlight brand is available online and by mail order in 10 oz. packages for $8.99. The coffee, part of P&G's gourmet Millstone line, is being procured by fair-trade organizations that work with companies to bypass middlemen and return a greater percentage of the retail price to producers.

Activists who had launched a public relations campaign and sponsored shareholder resolutions in favor of fair-trade coffee hailed the decision, noting that coffee prices are currently at their lowest level in 50 years. Although P&G is not the first big coffee seller to offer fair-trade products, the move should help encourage other companies in the industry, the supporters said.

"With world market prices as low as they are right now, we see that many coffee farmers cannot maintain their families and their land any more. We need fair trade now more than ever," said Jeronimo Bollen, director of Manos Campesinas, a coffee cooperative in Guatemala that markets fair-trade coffee.

P&G spokeswoman Tonia Hyatt said P&G was motivated by discussions with the activists, along with market research indicating that Millstone customers wanted to be offered fair-trade coffee. P&G had previously said that fair-trade offerings were unnecessary since it was working with coffee farmers to help them farm more profitably, as well as supporting community schools and other organizations.

Less than 1 percent of the coffee sold in the United States is of the fair-trade variety, but activists say the movement appears to be gaining traction. P&G is the second of the four largest U.S. coffee sellers to offer fair-trade coffee. Sara Lee Corp., whose brands include Chock Full o' Nuts and Chase & Sanborn, began selling it in 2001. Activists say they are trying to persuade coffee giants Nestle and Kraft Foods to follow suit. Starbucks Coffee Co. began selling fair-trade coffee in 2000.

The decision does not affect P&G's Folgers coffee, one of the company's $1 billion-a-year brands in annual sales. P&G said the sales of its Millstone brand, which usually retails for $6.99 for a 10 to 12 oz. package, are in the hundreds of millions of dollars per year.

Activists say they will be watching to make sure that P&G makes a strong commitment to the Mountain Moonlight brand, and that if the effort falls short, their campaigns will resume.

P&G is advertising the fair-trade coffee through in-store promotional materials, on its corporate and Millstone Web sites and by samples being given away to consumers at food- and wine-tasting events. If the Mountain Moonlight coffee sells well, P&G will consider offering it in stores, Hyatt said. She declined to say when that might happen, and she would not discuss sales goals.

P&G shares closed down 17 cents at $91.74 on the New York Stock Exchange.


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