I - Issue and Scope:

The primary Corporate Social Responsibility (CSR) issue in the case is whether Nestlé should label its new product ‘Partners’ Blend’ with the Fairtrade brand or continue with its own social responsibility initiatives. United Kingdom (U.K.) is one of Nestles major markets. Therefore, it is imperative for Nestlé to be aware of the social, environmental and financial circumstances surrounding its business.

Social: From the social perspective, the main circumstances that concerned Nestlé were local infrastructure, Fairtrade payment and the avoidance of child labor. In connection to that, products marked with Fairtrade label were described as “ethical” and “sustainable” conveying a broad message that farmers of these products have been given fixed price or have met ethical standards.

Environmental: From the environmental perspective, there is a growing market trend in the U.K. for environmentally-friendly materials and therefore recycled materials in the packaging would have a big impact in consumers purchase decision. In addition, ecological washing systems have been built by Nestlé initiatives in order to expand water distribution within communities. In 2004, there were 1000 Fairtrade products from 150 companies available in most of the super market stores in different product categories. Finally, improvements in nutrition, environmental standards and agricultural supply chain have been discussed as circumstances.

Financial: On the financial side, given the volatility of coffee prices as a result in changes on the supply, farmers have been negatively impacted. Also, the cost of certification from Fairtrade organization needs to be considered, along with what it might do to the farmers, as they are getting a fixed price, which in turn might attract them towards producing only coffee and nothing else.

Management Strategy

In the