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ROME, July 5 (Thomson Reuters Foundation) - Britain's second biggest supermarket faced mounting pressure on Wednesday over axing the Fairtrade label from tea for its own ethical sourcing logo which has sparked fears more companies could drop the certification scheme that supports poor farmers.
Sainsbury's, the world's largest retailer of Fairtrade products, started stamping its own "Fairly Traded" label on its own brand tea in May as part of a pilot scheme to move to an internally managed ethical sourcing scheme.
The retailer said its initiative improved on the 25-year-old Fairtrade model in which companies can use the trusted logo if they guaranteed farmers a fair price for crops and an extra premium to spend on community projects like roads and schools.
But the supermarket's decision has prompted concerns that poor farmers would be impacted and the pilot could lead to the logo being dropped from other products and spread to other companies - especially after Cadbury quit the scheme last year.
An online petition opposing the move now has more than 70,000 signatures while on Wednesday campaigners from charities Oxfam and Cafod, in tea bag costumes and waving placards, protested outside the company's annual general meeting.
"Sainsbury's is removing what little control some of the poorest tea farmers and producers have on how they spend the money they make," Matthew Spencer, Oxfam's campaigns director, said in a statement.
Under Fairtrade, on top of earnings from their produce, farming communities receive a bonus, or premium, worth about 10 percent of the tea price which they collectively decide how to spend.
The money usually goes towards healthcare, education and housing projects, said Spencer.
But he said with Sainsbury's pilot, farmers would have to apply to a board set up by the supermarket in Britain to receive the money and described the change as a "power grab".
"We don't believe the execution of this current model will, on balance, deliver positive changes for tea farmers," added Michael Gidney, chief executive of the Fairtrade Foundation.
But a spokesman for Sainsbury's denied the farmers would lose out, saying farmers would continue to receive all the funding currently in place and the pilot had safeguards to ensure the money reached "those it is intended for".
"'Fairly Traded' goes further than the current model with more benefits, including longer-term commercial relationships and individually-tailored data and support to help them make their businesses more resilient and sustainable," Sainsbury's Chief Executive Mike Coupe said in a statement.
Coupe added that the pilot didn't save the supermarket any money and had no impact on the price of its tea.
Fairtrade products usually lead to a slightly higher retail price.
"Rather than shout from the sidelines, we would encourage everyone to be open-minded and see if the pilot can be successful and improve lives," Coupe said.
Fairtrade is a global operation that works with over a million farmers and workers in Africa and the Middle East, and more than 250,000 across both Latin America and Asia and the Pacific.
$1 = 0.7738 pounds Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit news.trust.org