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Walmart's recently announced plans to offer fair trade certified coffee come as a

surprise from a company that promises low prices always. The Washington

Post reported Monday that Walmart's executives will visit Pocofundo Brazil this month to determine whether

Café Bomdia and its coffee co-ops are the right match for the Walmart stores.

Daniel Eekinson, Cato's's Associate Director of the Center for Trade

Policy Studies, answer some questions. Dan, this is obviously big news. Why is Walmart interested

in offering fair trade coffee to its customers.

Very simply because Walmart is in the business of making money and offering fair trade

coffee fits into its profit maximizing strategy. Fair trade coffee costs Walmart more to

purchase, but it also sells for a premium, and the per unit

profit might be higher for Fair Trade Coffee.

It depends on market conditions.

So there may be a short-run profit motive for Walmart to supply Fair Trade Coffee, but I think a more

viable explanation could be that Walmart sees it in its long-term interest to supply Fair Trade

Coffee.

As you know, Walmart is not a retailer known for supplying products demanded for

their intangible social value. Walmart is known for bringing products to consumers

at the lowest possible prices by seeking greater efficiencies throughout its

vast supply chain.

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