J Sainsbury said that it would begin the switch to Fairtrade banana suppliers from January next year and the process would be complete by July, when all ranges, from budget to organic, would carry the Fairtrade mark.

Waitrose will switch over by February to Fairtrade bananas, which guarantee a price that covers the cost of production plus an additional $1 per 18 kilo box of bananas ring-fenced for social development and better wages for workers.

Justin King, the chief executive of Sainsbury, said that the supermarket would also reduce the price of Fairtrade bananas by about 20 per cent to match the price of regularly sourced fruit, a move that would cost Sainsbury more than £4 million. Mr King said: “Our customers have clearly demonstrated in their behaviour that they value the benefits of Fairtrade. It will cost us money, but it works in the same way as any other investment in quality. We want the best-quality product. We might sell a few more bananas, because if you want Fairtrade we are the cheapest place to buy them, but it is part of the overall building of the Sainsbury’s brand.”

Retailers increasingly are competing to advertise their ethical credentials as shoppers’ demand for organic and fairly traded goods increases. Marks & Spencer has recorded a double-digit increase in sales of its tea and coffee since switching to 100 per cent Fairtrade certified in March this year, while the Co-op has switched all its chocolate to the ethically sourced brand.

Sainsbury’s said that its switch to 100 per cent Fairtrade bananas would be the world’s biggest conversion and would increase Sainsbury’s purchase of Fairtrade bananas five-fold. It is expected to result in the entire island of St Vincent in the Caribbean switching to Fairtrade principles for bananas. Growers in Colombia and Costa Rica, where Sainsbury’s sources its budget-priced bananas, will convert to Fairtrade as part of the project.

Mr King said that Sainsbury was looking at changing the way that it sourced other fruit and that it would be working with suppliers to diversify into other Fairtrade crops, such as mangoes and pineapples.

Harriet Lamb, executive director of the Fairtrade Foundation, which operates the brand’s certification scheme, said: “This is the most momentous decision for the banana market. Sainsbury’s sells half a billion bananas a year — therefore, the impact on banana farmers and their communities will be hugely significant.”

The conversion by Sainsbury’s will add £4 million to the social premium paid to Fairtrade banana producers in 2007, on top of a £3 million payment in place this year.

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