Switching to Fairtarde will leave the retail price unchanged and create social premiums of £4m (€6m) in 2007 driven by Sainsbury's, which will be returned to growers and communities, an increase from £3m (€4.5m) in 2006. As a result of the change Sainsbury's will buy up to five times the amount of Fairtrade banana's from producers.
"This move to 100 per cent Fairtrade leads the world, and really sets the standard for global Fairtrade sourcing," said Justin King Sainsbury's CEO.
Sainsbury's is already the UK's leading Fairtrade retailer and shifts over 1000 bananas per minute, since introducing them in 2000. Its move to 100 per cent Fairtrade bananas will make its share of the Fairtrade market larger than all the other supermarkets combined.
"This is the most momentous decision for the banana market - Sainsbury's sells half a billion bananas a year, therefore the impact of the banana farmers and their communities will be hugely significant," said Harriet Lamb, Executive Director of the Fairtrade Foundation.
Greater emphasis is being placed on Fairtrade after months of working closely with the Fairtrade Foundation and individual growers, and Sainsbury's hope to be able to extend Fairtrade status to new countries that previously failed to make the grade, the company claims.
The food retailer is responding to an increasingly ethical consumer base. Customers spend £55m (€81m) on Fairtrade products every year, £25m (€37)of which is spent on Banana's.
Sainsbury's shoppers buy the most Fairtrade bananas and it currently enjoys 40 per cent of the UK Fairtrade banana market selling half a million banana's every year.
The supermarket reports that 60 per cent of its customers buy Fairtrade produce during their shop.