Fair Trade in Public Procurement Law 2026

Definition: In the context of procurement law, fair trade refers to the consideration of fair trade principles – in particular adequate remuneration and minimum social standards in supply chains – as an award criterion, technical specification, or contract performance condition in the award of public contracts.

Last updated: January 2026 · Legal basis: Art. 67, 70 Directive 2014/24/EU, § 127 GWB, § 80 VgV, BVergG 2018

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Fair trade in public procurement

Public contracting authorities can and should use their procurement power to promote socially responsible business practices – fair trade criteria are a recognised instrument of sustainable public procurement. Fair trade refers to a trading system aimed at securing fair prices, decent working conditions, and sustainable production methods for disadvantaged producers in developing countries. In procurement law, the question arises as to the extent to which such criteria may be included in tenders.

The 2014 EU procurement directives substantially expanded the scope for social and ethical criteria. Contracting authorities can anchor fair trade requirements at various points of the procurement procedure.

Possibilities for legal integration

Fair trade criteria can be incorporated into procurement procedures as technical specifications, award criteria, or contract performance conditions – each with different requirements as to the link to the subject of the contract.

As a technical specification

Contracting authorities can require that supplied products meet certain social production conditions. Reference to fair trade labels (e.g. Fairtrade International) is permissible, provided that the contracting authority also accepts equivalent evidence from other labels (Art. 43 Directive 2014/24/EU, § 34 VgV).

As an award criterion

Pursuant to Art. 67 Directive 2014/24/EU, contracting authorities can use social aspects as an award criterion, in so far as they are linked to the subject of the contract. An award criterion of "fair trade certification" would be permissible where the contract concerns the supply of products that can be fair-traded (e.g. coffee, textiles, bananas).

As a contract performance condition

Under Art. 70 Directive 2014/24/EU, the contracting authority may lay down social and ethical contract performance conditions. A contract performance condition could read: "The contractor undertakes, when sourcing the goods covered by the contract, to use only suppliers that comply with the ILO core labour standards."

Limits to consideration of fair trade

The European Court of Justice (CJEU) has set limits for the use of fair trade criteria: they must be related to the subject of the contract, proportionate, and non-discriminatory.

In the landmark Max Havelaar judgment (CJEU, C-368/10), the Court ruled that fair trade labels as such may not be mandatorily required, unless equivalent evidence is accepted. In addition, fair trade criteria must not be designed in such a way as to systematically disadvantage suppliers from certain countries.

Practice in Austria and Germany

In Austria and Germany, numerous municipalities use fair trade criteria when procuring food, office supplies, and textiles as part of "Fairtrade Town" initiatives.

The procurement volume for fair trade products in the public sector is growing steadily. Fair trade requirements are being used increasingly, especially in canteen operations, the fitting-out of administrative buildings, and the award of catering services.

Related terms

• Sustainable procurement
• Green procurement
• Quality label
• Award criteria

FAQ

Can a public contracting authority tender only fair trade products? Yes, provided the requirements are formulated as related to the subject of the contract and equivalent evidence (not just the Fairtrade label) is accepted.

Is fair trade a mandatory criterion in Austrian procurement law? No. Fair trade is an optional criterion that contracting authorities can use on the basis of their procurement policy and within the scope permitted by procurement law.

Which label is regarded as evidence of fair trade? The best known is the Fairtrade label (Fairtrade International). Contracting authorities must, however, also accept equivalent labels or equivalent evidence from other providers.

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Last updated: January 2026 All information without warranty. For legally binding advice, please consult a law firm specialising in public procurement law.