Consumer: 'Ethical market' sees 18pc growth

Spending on green goods and services grew by almost a fifth over two years despite the economic downturn, new figures show.

The "ethical market" in the UK was worth 43.2 billion in 2009 compared with 36.5 billion two years earlier, an increase of 18%, according to The Co-operative Bank's annual Ethical Consumerism Report.

The report has been compiled since 1999 and analyses sales data for various sectors including food, household goods, eco-travel and ethical finance.

Winners throughout the downturn included Fairtrade products, the RSPCA's Freedom Food-labelled items and ethical banking, the report states.

However organic food, rechargeable batteries and real nappies, as opposed to disposable versions, lost out with consumers.

Spending on ethical food and drink increased by 27% to reach 6.5 billion, or 8% of all food and drink sales.

Fairtrade food grew by 64% to reach sales of 749 million, while sales of Freedom Food products tripled in two years to reach 122 million.

Sales of organic food fell by 14% to 1,704 million.

Ethical personal products including clothing and cosmetics was the fastest growing sector, increasing by 29% to reach 1.8 billion.

The market for green home products such as energy efficient appliances grew by 8% in two years to reach 7.1 billion.

Ethical finance increased by 23% to reach 19.3 billion between 2007 and 2009, helped by a "flight to trust" among consumers disenchanted with much of the financial services sector, according to the report.

Tim Franklin, chief operating officer of 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, other areas such as micro-generation and renewable electricity have unfortunately failed to make significant progress. We welcome the introduction of feed-in tariffs for household renewable generation and would hope to see the impact of these come through in future years' reports."

He added: "Consumer commitment to ethical products has remained strong through the downturn, however it is clear that ambitious legislation is needed to enable the mass-market take-up of low carbon lifestyles."

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