One of the leading lights of the Fairtrade movement has crashed into administration, despite ‘heroic efforts’ to save its 40 employees.

Gateshead-based Traidcraft was a Christian organisation which had spent four decades advocating the importance of organic farming, sustainability and transparency to the lives of growers and artisans around the world.

But just a few days ago Andrew Little and Gillian Sayburn of Begbies Traynor in Newcastle were appointed as joint administrators.

The organisation offered a huge range of ethical and fairtrade foods, beverages, household cleaning and rubber products, as well as fairtrade crafts and clothing, via a large, independent, extended network of ‘fairtraders’ and through its website.

  • To get your tickets for the BUSINESSiQ Awards, CLICK HERE

The business had been loss-making for a number of years as it has faced increased competition from a growing number of mainstream shops stocking fairtrade products.

Its problems were exacerbated by Covid lockdowns as well as by the pre-Christmas postal strikes which impacted online orders.

Having borrowed money to fund the working capital ahead of the Christmas selling season, the business proved unable to repay the money and Begbies Traynor was appointed to place it into administration.

The board of directors issued a statement saying: "Just as we were emerging from the pandemic, like many other retailers, we faced the combined effects of the war in Ukraine, rising energy prices, and increased transport costs.

"Sadly, despite the heroic efforts of our team at Gateshead, low consumer confidence during the critical autumn trading period led to a sales result significantly short of what was required to sustain the operation. December sales were also negatively impacted by the uncertainty created by Royal Mail strikes.

"After much deliberation and following advice from external advisors, we have come to the conclusion that the only honourable course of action is to appoint administrators. Our hope is that by doing this in a timely manner, we can minimise the impact on our suppliers and creditors.

"It is heartbreaking to bring the Traidcraft plc story to an end in this manner but we can at least take some consolation from the knowledge that we have been a major force for good in the ethical retail sector for over 40 years. 

The Northern Echo: A Traidcraft productA Traidcraft product (Image: Press release)

"We have championed the cause of trade justice to the point where we now have better standards and procedures in place to protect the rights and dignity of growers and producers all over the world. 

"We would like to offer our heartfelt thanks to all those who have journeyed with us as employees, board members, shareholders and suppliers. We would particularly like to thank our loyal band of “Fairtraders”, many of whom have been with us since the very beginning.

"Our hope and prayer is that others will also emerge to pick up the torch that we have carried for four decades."

Traidcraft plc’s assets, which include a large circa 100,000sq ft warehouse and offices in Team Valley plus a wide range of fairtrade stock, are being marketed by Eddisons.

The business has ceased trading and all 40 employees have been made redundant.

Read next:

Andrew Little, joint administrator and partner at Begbies Traynor in Newcastle, said: “Traidcraft really was one of the founders of the world fairtrade movement and it’s sad to see its demise although there’s no doubt that over the last 40 years, it has helped drive consumer demand for ethically-sourced products.

“We are currently working closely with Eddisons to market the business in order to provide the best return for creditors and we have already received interest from potential purchasers.”