Nathalie Thomas: Fairtrade boom is all because consumers love milk chocolate

ALREADY given in to your sweet tooth and reached for the chocolate? Well you wouldn't be the only one resorting to a Kit Kat or Dairy Milk bar to soothe the pain of a busy start to the working week. At least today, all of us who are chowing down on the sweet stuff can congratulate ourselves that, in so doing, we are also likely to be helping communities in developing countries to build sustainable businesses.

Research published this morning shows that Fairtrade is booming in Britain, with sales of ethical products breaking the 1 billion barrier for the first time. Shoppers are snapping up Fairtrade chocolate, coffee, tea, bananas and even cosmetics at an insatiable rate, pushing total Fairtrade sales up by some 40 per cent in 2010 to 1.17bn.

The Fairtrade Foundation, whose bubbly, but determined, executive director Harriet Lamb has been banging the ethical drum for years, believes the industry is be on the cusp of a step change, and it has predicted sales could almost double to 2bn by the end of next year.

The foundation hails the recent performance as particularly astonishing given wider economic sentiment. It claims there has been "no downturn on ethical values despite the tough economic times".

It's heartening that someone has faith that shoppers are prioritising ethics over household budgets. However, it would be interesting to see what companies such as Cadbury, Nestl and Starbucks have contributed to this recent sales boom.

Cadbury took the honourable decision to source the cocoa beans for its flagship Dairy Milk bar from Fairtrade farmers in summer 2009. Nestl wasn't far behind its rival, announcing a similar move for Kit Kat bars at the end of 2009. The sector scored another major coup when Starbucks promised to ensure that all of the coffee used in its espresso-based drinks in Europe would be Fairtrade-certified by March.

The question has to be asked: are consumers really coming over all ethical at a time of severe financial constraint? Or is this latest explosion in sales merely a by-product of the greedy hordes continuing to eat their regular chocolate bar of choice, which just now happens to be Fairtrade?

Estimates at the time of Cadbury's move placed its contribution to Fairtrade sales at some 180 million. So, while the Fairtrade Foundation proclaims the "UK still cares in tough times", something tells me that the hand of big business is behind the impressive sales surge.

Future growth in the Fairtrade sector will be highly dependent on persuading more firms to follow Cadbury's and Nestl's example and, with the economic outlook still uncertain, the 2bn sales by 2012 goal might not be so easily achieved. Over "Fairtrade Fortnight", a number of companies including Marks & Spencer will do their bit for ethical business by announcing Fairtrade collections.Let's hope it continues.

City veteran trains vision on Lloyds' Scottish branches

AS A former Lord Mayor of the City of London, Lord Levene of Portsoken is a man very much associated with the Square Mile. But, over the next six months, the City veteran will become an increasingly important player in the Scottish financial market. The 69-year-old, who was once an adviser to John Major's Conservative government, has set his sights on 600 Lloyds Banking Group branches - including the 200 Scottish Lloyds TSB outlets.

As soon as new Lloyds chief executive Antnio Horta-Osrio reports for his first official day of work tomorrow, the well-kempt Portuguese banker can be confident of receiving a call from Levene, who indicated in a Sunday newspaper that he would like to get his hands on the booty as soon as possible.

Last year he floated a company, NBNK Investments, on Aim directly for this purpose, raising 50m in the process. He is able to raise a further 3bn and is hopeful Horta-Osrio will take a different view from his predecessor, Eric Daniels, who wasn't in a rush to dispose of the assets.

Word leaking from Lloyds is that Levene is unlikely to be disappointed as Horta-Osrio, who has already been hard at work on a revised strategy for the taxpayer-backed bank, is keen to rid himself of the baggage from the HBOS takeover as soon as possible.

Both parties will have to move fast though - fears are growing that the Independent Commission on Banking is likely to force Lloyds to sell a further 400 or so outlets when it reports in September. The small business lobby in particular is eager that any buyer of the Scottish TSB branches makes a major commitment to the SME lending market, which is currently governed by a "duopoly". With some analysts talking about a deal within the next few months, Scottish lobbyists had better start dialling Levene without delay.