'Virtue' spending overtakes 'vice'

By THIS IS MONEY
Updated: 09:10 EST, 27 November 2006

The amount spent on 'ethical' products in the UK has overtaken over-the-counter sales of beer and cigarettes for the first time, a report out today says.

The value of ethical consumerism hit a record high of £29.3bn in 2005, according to the Co-op. This overtook the £28bn-worth of retail sales for booze and cigarettes, its annual Ethical Consumerism Report says.

The report evaluates the value of consumers' 'ethical spending' in areas such as food, transport, energy, holidays and financial products.

It says the total spend in 2005 rose by 11% on the previous year. That increase outstripped the 1.4% increase in overall UK household expenditure.

Organic products, Fairtrade goods, free-range eggs and other 'ethical' food products enjoyed an 18% year-on-year boost to £5.4 billion, the report says.

Energy-efficient electrical goods, 'green' mortgage repayments, wind-turbines and other green energy products rose to £4.1bn compared to £3.8bn the previous year.

Spending on eco travel and transport costs - which includes public transport, green cars and responsible tour operators - rose from £1.7bn in 2004 to £1.8bn in 2005.

Money spent on ethical banking and investments rose from £10.6bn to £11.6bn. And spending on personal products such as eco fashion and humane cosmetics increased by 5% to £1.3bn.

The Co-op's executive director of business management Craig Shannon said: 'The fact that the value of ethical consumerism is now higher than the retail figures for cigarettes and beers is a milestone.'

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But he warned that ethical spending had only become the norm in a minority of markets. 'Overall spend on ethical foods still only accounts for 5% of the typical shopping basket,' he said.

The Co-op's report draws on general spending figures from the Office for National Statistics. Its ethical spending figures were sourced from company sales figures plus a variety of trade bodies.

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