Ethical shoppers in Britain face something of a dilemma - again.

The giant Nestlé food corporation has been granted the Fairtrade label for its Kit Kat chocolate-coated wafers. It can add this to its 'Partners' Blend' Fairtrade instant coffee.

At the same time, Baby Milk Action has added Fairtrade Kit Kat to its list of boycotted Nestlé products.

Harriet Lamb of the Fairtrade Foundation tells the BBC that some 6,000 West African cocoa farmers will receive hundreds of thousands of pounds more next year. 'The significant volumes of cocoa that go into making Kit Kat,' she says, 'will open whole new possibilities for these farmers, giving them a more sustainable livelihood and the chance to plan for a better future.'

Over a billion Kit Kat bars are apparently sold every year to the notoriously sweet-toothed British consumer – more than anywhere else in the world. Britain's best-selling chocolate bar, Cadbury's Dairy Milk, went Fairtrade in March. A wild and cultish commercial for it has occasionally appeared on some of the smaller commercial TV channels since.

Harriet Lamb hopes that, together, they will 'tip the balance' in the cocoa trade.

Baby Milk Action have their doubts. Mike Brady, their Campaigns and Networking Co-ordinator, says of the Fairtrade Kit Kat launch: 'When Nestlé is on the record as saying that charitable contributions should benefit its shareholders, we should not be too excited by one of the world's most boycotted companies pursuing something like this.

'We will add Nestlé Fairtrade Kit Kats to the list of boycott products and recommend that anyone who is concerned about promoting real change for people in developing countries support the boycott and buy their products from companies with positive business values, not just token initiatives. There are companies whose entire output is Fairtrade certified after all.

'Nestlé systematically violates baby food marketing standards, undermining breastfeeding and contributing to the needless death and suffering of babies around the world - the changes we have been able to force on Nestlé are because of the boycott and it will continue until Nestlé brings its policies and practices into line with the marketing standards adopted by the World Health Assembly.'

So what is the beleaguered ethical consumer in Britain, or anywhere else for that matter, to do?

On the one hand, buying fair trade is surely better than not. Farmers of internationally traded tropical foods, like coffee and chocolate, undoubtedly benefit from fair trade when conventional 'world markets' routinely pay less than the costs of production. If fair trade accounts for just a tiny proportion of the coffee or chocolate sold by corporations like Nestlé or Cadbury, then perhaps increasing that proportion is the best, or at least the quickest, way of reaching more shoppers and benefitting more farmers.

On the other hand, who can trust corporations? Weren't they responsible for trade injustice in the first place? Aren't they still? Won't they always be driven to keep it that way? What's to stop them doing what they always do with successful upstart 'niches': gobble them up? Has Nestlé really abandoned its commitment to free-market principles, which fair trade blatantly contradicts? What's changed so deeply in the very same Nestlé that, just a couple of years ago, was rubbishing fair trade for actively making the plight of coffee farmers worse?

Numerous campaigns (particularly in the US) still have to highlight Nestlé's wider and lamentable record on human rights, which shows no signs of improving. Does the Fairtrade Foundation feel free to comment? If not, what is the point of fair trade?

For myself, I'm with Baby Milk Action. For one thing, fewer people are likely to know. And, given the choice between a label and a hard-fought-for boycott (which, incidentally, the New Internationalist helped to promote from its inception in the 1970s), I'll go with the boycott. So, after doing my level best to advance genuinely fairer trade for the better part of 20 years, I'll actually be boycotting a product with a Fairtrade label on it - though, I confess, I rarely ate the sickly things anyway.

To me, fair trade loses more than it gains when it's branded with Nestlé or Cadbury - just as the Body Shop now is with L'Oreal, and so many NGOs have been with corporate sponsorship. The would-be ethical consumer gets put in an impossible position and might well become an endangered species as a result. It's hard to avoid the conclusion that this is what the corporations are really after. An honest but difficult message about justice gets confused, diluted, discredited – just when it needs to be heard more clearly than ever.

I find myself wondering - is generalized confusion as useful to Nestlé or Cabury (soon to be Kraft?) when it comes to fair trade as it is to Exxon and Shell when it comes to climate change?

A minor - and entirely avoidable - tragedy, I reckon.