Analyzing the use of “fair trade” products seals, the National Advertising Review Board held that because the seal conveyed “a message of significance to consumers,” its language should be qualified to provide consumers with more information about the relative percentage of fair trade-sourced ingredients by weight.

Last year, in a case of first impression, the National Advertising Division reviewed the requirements under which the TransFair “trade seals” can be displayed.

TransFair issues two types of symbols: a “whole product” seal for products that are 100 percent fair trade-sourced and an “ingredient” seal for cosmetic and personal care products that have a combination of fair trade-sourced and non-fair trade-sourced ingredients. TransFair requires that these composite products contain at least 2-5 percent of fair trade-sourced ingredients by total weight.

The seals are identical except for a statement on the bottom of the ingredient seal that states that certain specific ingredients are either fair trade-sourced or contain “Fair Trade Certified Ingredients.” Composite products also include a front panel “made with” or “contains” statement identifying all the fair trade-sourced ingredients and asterisks on the ingredient panel indicating the fair trade-sourced ingredients.

The challenger in the case, Dr. Bronner, appealed to the NARB, arguing that the ingredient seal falsely implies that fair trade-sourced ingredients constitute a substantial part of the product.

After examining the context of the entire product packaging, the panel agreed.

“One message reasonably conveyed by the TransFair ‘Fair Trade Certified’ ingredient seal for composite products . . . is that fair trade sourced ingredients represent a significant percentage of the product’s ingredients.” The location of the seal on the front of the package – required by TransFair – “communicates to consumers the message that the information is significant and relevant to the consumer’s buying decision.”

Although “the ‘made with’ or ‘contains’ list reduced the likelihood that consumers would take away an erroneous message that a significant percentage of the ingredients were fair trade sourced, the panel believes that prominently featuring the name of fair trade sourced ingredients on the front of the packaging does just the opposite – it implies significance of the listed ingredients with respect to overall product composition.”

One of the challenged seals appeared on soap packaging and read “Made with Fair Trade Certified ingredients: Shea Butter, Cocoa Butter, White Tea Extract.” On the ingredients panel, located on the back of the packaging, the ingredients – 5th, 7th, and 8th on the list – included an asterisk to indicate they were fair trade-sourced.

But the NARB said such identification was not enough to overcome or qualify the implied message of significance on the front of the package.

“Putting an asterisk after each fair trade sourced ingredient does not show the relative proportion of fair trade sourced ingredients in the product and does not provide enough information for consumers to determine whether fair trade sourced ingredients represent a significant percentage of the product’s ingredients, which is the message reasonably conveyed by use of the ‘Fair Trade Certified’ ingredient seal on the front of the package,” the panel wrote.

Therefore, the NARB recommended that TransFair modify the requirements under which its “Fair Trade Certified” ingredient seal may be used. Composite products should provide sufficient information for consumers to determine the relative percentage of fair trade-sourced ingredients by weight.

To read the NARB’s press release about the decision, click here.

Why it matters: Given the rise in environmental and social impact advertising claims, the self-regulatory body noted that it plays an important role in helping purchasers make informed decisions. “While it is not the panel’s role to determine acceptable thresholds or standards used by certifying organizations, it is the panel’s role to recommend changes it believes are necessary to ensure that fair trade certification seals convey an accurate message to consumers. The fact that there are not generally accepted or legally required thresholds for the amount of fair trade sourced ingredients in composite products that can display a fair trade certified seal makes it even more important that consumers receive an accurate message as to the fair trade content in products displaying the seal.”