Green goods get the red card

Bosnia, BSE and bad labelling are all putting the squeeze on environmentally friendly products, writes Paul Gosling

Sainsbury and the Co-op have become the latest major retailers to cut back on selling "environmentally-friendly" products, following a slump in green demand. The signs are that consumers are switching their concerns from the environment to animal welfare.

The Co-operative Wholesale Society is selling off stocks of its discontinued Environment Care range, which at one time contained 40 products. It has also banned the phrase "environmentally friendly" in stores, on the grounds that all manufacture damages the environment.

Asda and Sainsbury have reduced the number of own-brand green products they sell, and Tesco is reviewing its range. Sainsbury's Green Care range has been slimmed down, with the elimination of its clothes-wash and fabric- conditioner products. The company admits this follows a decline in sales, but says it also reflects improvements in its standard products.

"We reviewed the Green Care range earlier this year, after the sales of some products had declined for some time," said a Sainsbury spokeswoman. "Some were just falling off the edge. The other reason was that the difference in environmental performance between Green Care and our standard products was no longer significant."

But Ecover, which claims to have a better environmental performance than supermarket own-brand products, reports a big drop in sales. The company says that while there are an increasing number of independent stores that sell its products, with some now providing a refill service, many of the big multiples have dropped the range.

Ecover argues that consumer cynicism about product labelling has contributed to declining sales, a view confirmed by a report last month from the National Consumer Council. The NCC reported that shoppers thought that green products were more expensive and less effective than standard alternatives. It also found that claims about environmental performance were often "misleading,

meaningless or even downright dishonest".

Even standard claims caused confusion, the NCC found. People often avoided recycled toilet paper in the belief that it had been used before as toilet paper.

The NCC called for a strengthening in the Trades Descriptions Act to clamp down on exaggerated and false claims for performance. Others back attempts by the European Commission to introduce an effective eco-labelling system, which provides factual indications of the environmental

performance of a product. In Britain, so far, eco-labelling has been introduced only on washing machines, but the scheme will be boosted next month when the Co-op introduces eco-labelling on own-brand toilet and kitchen paper.

John Elkington, of environmental consultants Sustainability, believes that unemployment and job insecurity have made consumers unwilling to pay a premium for green products. Meanwhile world events such as Bosnia may have fostered a sense of powerlessness. He predicts that things will change as the millennium approaches, and people take stock of the state of the world.

Yet while sales in green products have declined, more people want their meat and eggs to come from animals that have been well treated - a trend that is likely to be accelerated thanks to the BSE crisis. Free-range eggs account for 18 per cent of the Co- op's egg sales, compared with 5 per cent a year ago. Three quarters of Marks & Spencer egg sales are now free range, while all its pork, lamb and beef has been reared outside.

Sales of organic produce, on the other hand, have been disappointing in trials conducted by the multiples. Consumers have refused to pay premium prices for produce that can look unattractive. The chains have focused instead on reduced pesticide and fertiliser content. Sainsbury claims a 95 per cent reduction in pesticides in its tomatoes.

While retailers are shouting about it less, what they are actually doing is steadily improving environmental performance. But they face a further big test, with increasing demands from green lobbyists to source locally, rather than distribute through central warehouses. This is now beginning to happen at Sainsbury's Savacentre stores, following success at the group's Shaw's subsidiary in the US.

Undermining centralised distribution, and promoting the sale of locally grown produce, would not only reduce transport costs and emissions, but would also have a profound effect on retailers' own organisations and on agriculture.