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The credit crunch has not put a halt to ethical shopping, with green consumerism growing despite a fall in overall household expenditure, according to The Co-operative Bank.

The bank's annual report into green spending on goods and services showed that it grew 18 percent over the past two years. The UK ethical products market was worth £43bn (EUR 52bn) in 2009 compared with £ 36bn (EUR 44bn) in 2007. The growth was despite a two percent fall in overall household spending in the last year.

Winners throughout the downturn included Fairtrade products, the RSPCA's Freedom Food labelled items and ethical banking. However, organic food, rechargeable batteries and real nappies lost out with consumers.

Spending on ethical food and drink increased 27 percent to £6.5bn (EUR 7.8bn), representing eight percent of all food and drink sales.

Fairtrade food grew by 64 percent to reach £749m (EUR 900m), while sales of Freedom Food products tripled in two years to reach £122m (EUR 146m). Free range eggs grew by 42 percent from £314m (EUR 377m) in 2007 to £447m (EUR 536m) in 2009, and free range poultry increased by 34 percent to £174m (EUR 209m). Sustainable fish also saw a huge climb, with a 154 percent increase to reach £178m (EUR 214m) last year. However, sales of organic food fell by 14 percent to £1.7bn (EUR 2.0bn).

Ethical personal products was the fastest-growing sector, up 29 per cent to £1.8bn (EUR 2.2bn). Ethical clothing grew by 72 percent to reach £177m (EUR 212m) while cosmetics increased 34 percent to reach £486m (EUR 583m).

Tim Franklin, chief operating officer at The Co-operative Financial Services said: This annual report clearly shows that the growth in ethical consumerism continues to outstrip the market as a whole.

I have no doubt that this will come as a surprise to those commentators who thought ethical considerations would be the first casualty of an economic downturn.

However, whilst the rapid growth in areas such as fairtrade and ethical finance, which we have witnessed in previous years continues to grow, other areas such as micro-generation and renewable electricity have unfortunately failed to make significant progress. The report showed that last year the average household spent £764 (EUR 917m) on ethical goods and services, a three-fold increase from 1999.

Organic Monitor Comment
Although a few ethical product category sales declined during the financial crisis, the general trend remained positive. Higher growth is envisaged as consumer disposable incomes slowly start to rise again and as consumer awareness of ethical issues rises.

Source: Press Release / Organic Monitor


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