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Last Updated: Monday, 2 February, 2004, 11:33 GMT
Cafedirect floats ethical issue
Tea pickers
The company puts money back into its producers' operations
Ethical investors are being given the chance to buy shares in the UK's largest fair trade hot drinks company.

Cafedirect, helped by bank Triodos, has launched a public share issue, which it hopes will raise £5m ($9.1m).

The company pays its 250,000 coffee, tea and cocoa producers in the developing world guaranteed fair prices, above the current market rates.

The minimum investment is £300, and the company says the money "will support significant business growth".

We have hopeful expectations that the share issue will go well, there has been a lot of interest in the run-up
Cafedirect spokesman

World coffee prices are have hit a 30-year low with many farmers selling coffee for less than it costs them to produce it.

Fair trade coffee growers get a better price, which can be double or triple the market price.

Launching the share issue, Penny Newman, Cafedirect's chief executive, said investors could "help us shape a better future for millions of people - those who grow the products as well as those who drink them".

As well as paying producers guaranteed minimum prices, the company also makes long-term investment in its producer partners' organisations.

A Cafedirect spokesman said: "We have hopeful expectations that the share issue will go well, there has been a lot of interest in the run-up."

Growing market

Research shows ethical investments have become more popular in recent years.

According to ethical investment research firm EIRIS, the size of ethically screened funds in the UK stood at £4bn in 2001, compared to £1.5bn in 1997.

And in 2002, UK sales of Fairtrade products reached a retail value of £63m, a 90% increase from 2000.

Cafedirect owns the country's sixth largest coffee brand, and has developed Teadirect into one of the fastest growing tea brands in the UK.

In 2003 Cafedirect re-invested 8% of its gross profits into training programmes to provide market information and management skills to its producers.

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