December 15/London/The Guardian -- Sales of organic food and drink slumped by 10% to £1.53 billion last year as shoppers opted for cheaper alternatives, according to a new report.

However, despite the impact of the economic downturn, overall sales of "ethical" goods and services -- ranging from food and drink to transport and funerals -- were generally resilient, increasing by almost 9% last year to £46.8 billion from £43 billion.

The Co-operative Group's annual report into ethical consumerism showed the biggest increases were in sales of small scale "micro-generation" products such as solar thermal and solar photovoltaic panels and heat pumps (up by 386%), and "green" cars (up 129%).

Other sectors enjoying huge growth are Fairtrade food and drink, which pay a premium to farmers and producers in poor countries to help them work their way out of poverty, which recorded a rise of more than a third (36%). Sales of fish from sustainable sources grew by 16.3%, and expenditure on green funerals leaped by 35% to £6.9 million from £5.1 million.

The report is based on national data covering spending through all retailers rather than just from the Co-operative's own outlets.

The slump in sales of organic food means they have plummeted by 23% from an all-time high of almost £2 billion in 2008.

Paul Monaghan, head of social goals at the Co-operative, said, "The report shows that intervention by enlightened businesses, together with regulatory intervention, is driving ethical sales growth.

"During the downturn we've seen some of the biggest ever Fairtrade conversions, be it in chocolate or sugar, and business is beginning to respond to the challenge to provide consumers with more sustainable products and services such as fish, palm oil and soya.

"Ethical consumers are still a vitally important barometer of change. However, the actions of progressive business are now a significant contributor to sales growth."

 From the December 15, 2011, Prepared Foods' Daily News.