Martin Hickman: Are we all ethical shoppers now?
Saturday 26 September 2009
Twenty years ago, three graduates started a small magazine in a flat in Manchester. At the time of Ethical Consumer's launch, there was no Fairtrade, Prince Charles's interest in organic food was "quirky", and there was little fuss over child labour or the environment. Two decades on, has the much-vaunted rise in organic, Fairtrade and "green" products turned Britain into a nation of ethical consumers?
Undoubtedly, there has been a surge in interest in using shopping as an agent of change and a wider availability of goods kinder to people, animals and the planet. Supermarket aisles abound with labels proclaiming "low in fat", additive-free, cruelty-free, organic, or Fairtrade.
According to the Co-op, ethical consumption rose by 15 per cent to £35.5bn in 2007, compared with £5.7bn in 2000. The Co-op's total includes sales of a wide variety of "ethical" goods and services, ranging from pesticide-free food to green washing machines to investment funds that do not to channel money into tobacco companies and arms manufacturers.
Some purchases in these sectors are not really ethical "choices": few electrical chains now stock domestic appliances rated below "A" for energy efficiency, a sector worth £1.8bn.
Other areas, such as clothing, show little progress, despite entreaties for the public to buy more carefully. A year ago, War on Want published a report on sweatshops in which it described the pace of change for textile workers earning 5p an hour sewing clothes for British shops as "glacial". Only a few retailers merited "two cheers" for their efforts: Monsoon, Gap, Marks & Spencer, Next and New Look.
However, other sectors abound with sales that are specifically and demonstrably ethical, such as the £8.9bn that went on ethical investments, £1.9bn on organics and £458m on Fairtrade, which raises returns for Third-World farmers.
Some of these products are more expensive than standard lines. Organic food is up to 60 per cent more costly than conventional fruit and vegetables. RSPCA-approved meat costs 70 per cent more than the output of factory farms. Fairtrade often carries a premium, though not always.
Because of the popularity of ethical shopping, multinationals have taken an interest in smaller firms with different outlooks. Sometimes they have bought them: Unilever, for instance, took over the socially aware ice cream-maker Ben and Jerry's, while Cadbury gobbled up the organic chocolatier Green & Black's.
In both cases, the founders hoped the big boys' millions would expand their principled concerns – and that their corporate values would seep into the parent company. This is the hoped-for mainstreaming of ethics. And it seems to be happening, slowly.
This year, Cadbury converted all bars of Dairy Milk to Fairtrade cocoa beans, pouring millions into the pockets of poor farmers in Ghana. Starbucks has done the same for its espresso-based drinks in Britain, and Tate & Lyle likewise for its shop-sold sugar. In each case, the companies promised not to increase their prices; there was no ethical "premium".
Other examples include supermarkets adopting the RSPCA's Freedom Food scheme as their baseline for poultry production; shoppers can't buy an ordinary factory-farmed chicken at Waitrose or Marks & Spencer.
Despite these significant changes, the ethical sector is still small. Organic food – which is kinder to wildlife but uses proportionately more resources – accounts for only 1 per cent of food sales. Despite a 43 per cent rise in revenue last year, Fairtrade is only at 1 per cent, too.
Even with its wide definition, the Co-op's Ethical Consumerism report acknowledges that "ethical" shopping represents only £35bn of £600bn of retail spending, or 6 per cent.
When the Government makes ethical behaviour compulsory, or when big firms mainstream Fairtrade, change happens quickly.
Without those big changes, action by individuals will keep the ethical market rumbling along at a few per cent.
Heroes & Villains
The supermarket is changing the palm oil in its own-brand digestives and rich-tea biscuits to supplies certified by the Roundtable on Sustainable Palm Oil (RSPO). This should mean that none of it comes from newly hacked-down forests in Borneo and Sumatra, where the planting of oil palms leads to the eviction of nomadic tribes and kills off endangered wildlife. While some environmentalists fear the RSPO scheme is too weak to halt deforestation, this is a significant step for the British retailer, following its decision to use only RSPO-oil in its own-brand fish fingers. Sainsbury's sells 300 million rich-tea and digestive biscuits a year.
Villains: Franchised car deals
New research shows that dealers for car companies charge significantly more than independent, or backstreet, garages. Warranty Direct, which insures drivers for repairs, checked labour rates at more than 5,000 garages. It found that in the past year, the average rate charged for an hour of a mechanic's time fell by 4.8 per cent to £90 an hour. Over the same period, labour rates at cheaper independent workshops rose by less than 1 per cent to £56. While franchised dealers have more expertise at fixing their own cars, that's a big difference. Unsurprisingly, at £94 an hour, London was the most expensive place for repairs. Mechanics in Cornwall cost £61 an hour.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
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