Insights:
- Vietnam’s exports to the UK reached over $5 billion in the first eight months of 2024, a 23.5% increase, fueled by Fairtrade certification and UKVFTA benefits.
- Cashew exports rose 9.9% to $87 million, while cinnamon exports grew by 94.4%, showcasing the potential of Vietnam’s Fairtrade-certified products in the UK.
Vietnamese fruit and vegetable exporters benefit greatly from Fairtrade certification under the UK – Vietnam Free Trade Agreement (UKVFTA). This certification aligns with the expectations of British consumers, who are becoming more selective for such products.
Understanding fairtrade certification
Fairtrade certification prescribes the way products will be made. The workers who participate in the production processes earn decent salaries, work in better conditions, and are allowed to participate in decision-making. The businesses applying for this certification must comply with high ecological standards, reduce the application of injurious chemicals, and contribute to protecting the biological diversity of the environment.
This certification signals a commitment to ethical and sustainable practices, making products more appealing to socially conscious consumers in markets like the UK.
The rising demand for fairtrade products in the UK
In a survey conducted by YouGov, 70% of the adult population in the UK claimed to have purchased Fairtrade products in the year 2024. These products are the work of farmers and other agricultural workers, many of whom reside in poorer countries. Additionally, research conducted by Fairtrade confirms the trend of British people seeking fair prices and better trading conditions for farmers from foreign countries. Many consumers believe buying Fairtrade products directly supports these farmers, improving their livelihoods and ensuring stability.
This growing interest in ethical consumption underscores the value of Fairtrade certification for Vietnamese exporters. UK brands and retailers actively participating in the Fairtrade initiative provide an additional platform to showcase certified products, increasing their visibility and market appeal.
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Leveraging the UKVFTA for agricultural exports
Vietnamese agricultural products benefitted from the UKVFTA’s new agreement, which eliminated tariffs on several commodities. Currently, items, which include lychees, rambutan, longans, dragon fruit, and mangoes, have become tariff-free, making them more competitive in the market of Britain.
When combined with Fairtrade certification, this tariff advantage could further enhance the attractiveness of Vietnamese products to British consumers, who tend to buy more expensive goods produced under Fairtrade standards. It acts as a quality control mark, ensuring all goods on the market have been certified and are of good quality.
Building stronger Vietnamese brands
Fairtrade certification can boost the ease of marketing and promoting Vietnamese agricultural products in foreign markets. It is especially the consumers who are more concerned about the origin and production methods of the goods who find such products appealing.
Nevertheless, the process of getting certified involves a number of prerequisites, such as… compliance with labor norms, protection of the environment, and ensuring transparency and fair trading. To get certification, companies have no option but to invest in the modernization of their production plants, human resource training, and implementation of best management practices. Although this appears to be the more demanding approach, the potential behind these efforts is long-term which can help in building the credibility of the brand and increasing the market penetration.
Vietnamese fairtrade-certified products
Several Vietnamese agricultural products have successfully achieved Fairtrade certification. Notable examples include coconuts and coffee from businesses committed to sustainable practices. These products demonstrate the ability of Vietnamese exporters to meet global standards and showcase the country’s capacity to deliver high-quality, ethically produced goods.
The UK: A vital export market for Vietnam
After the Netherlands and Germany, the UK is still the top export destination for Vietnamese goods in Europe. For the first 8 months of 2024, the value of imports from Vietnam to the UK reached $5 billion, which is a rise of 23.5% from the previous year’s figures.
Agricultural goods are a major part of this trade. Fairtrade provides an avenue to expand these exports as the demand for ethically produced goods increases in the UK.
Challenges and opportunities
As much as it is apparent that Fairtrade certification has its advantages, the certification did not come easy. Businesses have to invest some time and effort towards minimum requirements. This includes certifying proper environmental and labor practices and adapting their production to Fairtrade standards.
Although it is a difficult process, the returns are also worth the effort. Not only does the certification increase sales, but it also allows the placement of Fairtrade-certified Vietnamese products in the UK market and other markets as quality goods that were produced ethically.
Conclusion
Fairtrade certification opens up an interesting chance for Vietnamese agricultural exporters. By supplying British consumers with ethically sourced products, firms can take advantage of the benefits of the UKVFTA to bolster their hold in the UK market. Through continual investment in ethical and sustainable practices, Vietnamese agricultural produce has the potential to gain further markets overseas and enhance the growth of the country’s export sector.
