VEGA News Item

Ethical Trading and False Hopes - 17/08/2006
Veggies aren't the only ethically-minded consumers overlooked in modern trends expressing the anthropocentric mens sana in corpore sano concept as the driving force in ethics rather than expression of the wider considerations of do good altruism and exercise of self restraint.
1. Veggies aren't the only ethically-minded consumers overlooked in modern trends expressing the anthropocentric mens sana in corpore sano concept as the driving force in ethics rather than expression of the wider considerations of do good altruism and exercise of self restraint. The world is too much with us, as the poet rimed: we eat too much, buy too much and procreate too much. We plonk too heavy a footprint on the environment. Health warnings abound, with tardy success, to curtail the risks of smoking but no such warnings of violations of the Five Freedoms inflicted on animal slaves overworked and overdone in the massacre behind the over-abundance of cheap animal protein and environmental damage that exercise of ethical muscle could avoid. Manufacturers and retailers may value-add alternatives with reduced objections, but curbing demand and greed must depend on consumer power spurring resolute government interventions: there's no self-denying incentive in industry to promote real thrift and abstemious altruism and the closure of monstrous workings of malign capitalism. VEGA takes soundings in the ethical trade.

2. "As people become more attuned to issues such as climate change, fair-trade and organic food, more and more suppliers are using ethics to boost sales, too" states The Grocer (12 August 2006). "New manufacturers are increasingly conscious of the benefits of joining either the healthy or the ethical camp, and established companies such as Nestlé and Proctor and Gamble are making moves to improve their reputations," it continues, adding that "Nestlé has launched a website dedicated to answering critics of its infant formula marketing in developing countries, while P & G has forged a partnership with the Humane Society of the USA to eliminate the use of animals in product development. If this trend continues, ethical conduct won't just be a way to tap into a small minority of consumers, it will be a requisite of trading. But can companies still be profitable while being ethical?" And how, we may ask, are manufacturers of household goods and retailers and their customers going to extricate themselves from complicity in the threatening EU requirements in its REACH project to run tests on animals to ascertain the safety of many familiar products used in traditional functions? Veggie consumers may also be surprised to find Nestlé entering a market providing some of their standbys in the food and confectionery sectors, which are undergoing many changes and takeovers.

3. Commenting on ethical trading The Grocer observes that "thirty years ago companies that put the welfare of suppliers, animals, workers and indeed consumers before the almighty bottom line were few and far between. The launch of the organic movement in the 1980s and the birth of the Fairtrade Foundation a few years later changed that, as grocery retailers, ever sensitive to consumer sensibilities, started supporting these campaigns. In the past year everyone has been flashing ethical credentials. Take the Waitrose Foundation, set up to improve conditions for South African farmworkers; Tesco's £100m environment fund; and Asda's commitment to recycle all its waste." We can add the supermarket's efforts at curtailing the need for plastic bags and thus reducing the risks of litter in the environment to wildlife and to farmed animals.

4. Cafédirect, the Fairtrade coffee, tea, and cocoa supplier increased its turnover by 14% in 2005 to £19.75 million with an operating profit of £665,000, with a margin of 3.4%, which is "relatively modest" but enough to prompt the organization to hope for a future as a global brand. "We're looking at developing a brand in Tanzania and want to establish markets in Mexico, Europe, and the USA too," states an executive (The Grocer 12 Aug 2006). Last year 86% of the profit went back to growers "through a variety of support and development activities." Global sales of fairtrade lines increased by more than a third to £758m in 2005. In the UK 40% of households are reckoned to have bought a fairtrade product last year, when goods branded with the Fairtrade mark reached £195m, up to 40% on the year before.

5. In a similar trend organic sales have increased from just over £100m in 1993/1994 to £1.2bn, an annual 11% increase, in 2003. "Ethical" investment and banking is growing at a year-on-year rate of over 15%. Money so invested exceeded the £10bn mark in 2004. The Grocer reports a leap of 30% in 2005 to £1.5bn in sales of organic food.

The Value of Sympathy and the Price of Pity

6. The Grocer refers to a report published 2 weeks ago by AccountAbility and the National Consumers Council, entitled What Assures Consumers? It states that 90% of UK consumers oppose caged egg production (and 80% support reducing food miles - which wouldn't be an easy calculation for a living machine fuelled with materials imported from faraway places). The report discloses, however, that only 50% buy free-range eggs. The Guardian (12 August 2006) weighs in with another indictment under the heading Young Shoppers scorn ethical wear. Supermarkets, the nation's major grocers, are moving into non-food commodities, clothes and footwear being prominent. "The plight of child laborers and sweatshop workers is far from the minds of most young people on Britain's high streets, according to a survey that finds that half of under-25s do not care how their clothes are produced," begins an article, with a forecast from "findings that suggest the new wave of fair-trade outlet face an uphill struggle to convince younger shoppers to buy organic and ethically-produced garments." Only 42% of under-25s said they took any notice of ethical issues when it came to what they wore. Only 27% of people overall said they would be willing to pay more to guarantee their clothes were made in a sustainable way.

7. Animal welfare and wellbeing for non-human animals rate barely a mention in these pages on ethical trading. They have been supplanted by anthropocentric notions of "our" environment, an irredentist arrogance that is actually growing in intensity, smothering finer aspects of congenial living. These wider views must occupy us more for too muchness - nimiety. Overpopulation, overconsumption and use of animal, mineral, and vegetable resources, and a tread on the land where "our feet's too big", and we think too much with those pedal extremities when the challenges of reform and changes confront us. In April last year The Economist proffered its dietary advice in the summary of "a healthy diet built on a base of grains, vegetables and fruits, followed by ever decreasing amounts of dairy-products, meat, sweets, and oils", together with increased physical activity. This advice connotes a portfolio of disinvestments for the food industry and various and immediate reliefs for the exploitation of animals and the land and the environment generally. This theme has been taken up in our manifesto for A New Kinder Farming, which has a portfolio of dietary investments in "salutary food from salubrious farming."

8. The Grocer article on ethical trading gives a brief paragraph on free-range egg production as an example. "Free range egg sales grew by 38%, from 24% to 30% of all eggs sold in the UK between 1998 and 2003. In terms of retail sales Sainsbury's reports that free range eggs account for more than 50% of total egg sales. These figures underestimate the intake of eggs in prepared foods, for which several supermarkets are specifying free range eggs; and they also ignore a decade-long decline in egg sales that ended in 2000 or so and began a year-on-year increase countervailing the good that claims for free range might have bestowed. Further, the canny consumer would see the ludicrous free range description as a welfare sham for an almost flightless freak of breeding with the innate belonging to the elements of trees, jungle, and shade rather than exposed naked like a demure maiden subject to the constant threat of "the curse" and frustrated reproduction and mothering. Free range is a cruel deception in this context.

9. The remarks on ethical trading bring up many points for us as citizens, customers and consumers, as well as heavily involved accomplices in the food industry. We have also the responsibility to seek soundings from our non-human companions, many of whom we have modified into a curiously and literally neutered form of domesticity; and we must stand in humility before the numinous of the whole environment, which we now ravage under the influence of domination, territorial aggrandisement, and of the overweening demand for good health and remediation of mistakes and sloth.

Ethical Investment

10. The Independent's Save and Spend article on 12 August repeats the information we have given on advances by Premier Foods, and trumpets "Healthy returns available as Briton's get fitter", as a result of which sales of snacks and fizzy drinks are declining while healthier products are booming: market research specialist Mintel estimates sales of the latter rose from £3.7bn in to 2003 to £3.9bn last year.

11. The Independent's review continues: "Some analysts believe the trend is part of a wider movement towards more ethical consumerism - that healthy eating goes hand in hand with greater environmental awareness, for example, or an enhanced sense of social responsibility. Alternatively, this could just be the latest fad, in which case it won't last." Hedging his bets, the commentator observes: "Either way, companies such as Premier, which successfully tap into the health trend, stand to continue reaping a financial reward." This takes account of Premier's acquisition of Quorn and the health claims furthered for the product. Citizens, customers, and consumers are all investors and accomplices of the food industry every time they sit to eat (or, quite likely now, to graze eating on-the-go), but the Independent adds the further dimension of investment, citing emphasis for investors that are market aware on these issues and are prepared for change, having "a history of being able to adapt". It quotes the manager of the Norwich Union UK Ethical Fund, "seeing the investment opportunities in the consumers' desire for a healthier lifestyle (which) is likely to go hand-in-hand with more legislation designed to tackle obesity and other lifestyle-related problems."

12. The Sustainable Futures socially responsible investment team at Norwich Union has identified the move to a healthier lifestyle as a particular theme on which to focus. In particular, "they look for companies with good research and development facilities and a track record for innovation." They are attracted by companies noted for good labelling and packaging and, "above all" offering products with real health benefits and honest marketing, because consumers will pay a premium for products that they think are healthy.

13. The issue of Cadbury's purchase of Green and Black's organic chocolate brand receives an answer from a stockbroker, commenting on this key issue for investors to consider: "Cadbury's, for example has been very careful to keep" Green and Black's "very separate" and "as a result of the latter's sales have continued growing healthily, despite general concern about chocolate snacks and the specific scandal of Cadbury's admission earlier this year that a factory problem had led to some of its customers being poisoned by the salmonella virus." We identify in these examples the influence of brand names, corporate responsibility, and interpretation of the old adage of sinners coming (or being driven) to repentance.

Fair Shares

14. The Independent concludes with a list of "companies to back as a bet on health", which we summarize and comment on as follows:
Center Parcs. "An absolute temple for people who want to take an active holiday… it could also benefit if people begin taking more holidays in the UK, as concern about the environmental impact of air travel continues to grow."

Danone. "A long term holding of the Norwich Union team, because products such as Actimel have been well-positioned to benefit from growing demands for functional foods - Actimel contains probiotics that help bodies' immune systems… we also like the fact the company has a good track record on research and development and innovation" (but belittled, they must surely admit, on these and other grounds by comparable dairy-frees - these must count as fair shares in the livestock market).

Emap. The consumer and business magazines publisher, which "has a number of publications that will benefit" consumers seeking more information about the health issues of food, diet, and exercise, according to a recommendation from Hargreaves Lansdon Stockbrokers (HLS), who identify Here's Health and Slimming and Health as estimable Emap publications.

Goals Soccer Centres. A small company that hires-out 5-a-side soccer pitches. After a shaky start "the company has performed strongly - pretax profits rose 355% to £2.8m in the last financial year and the company has begun paying dividends (Public and social facilities for a wide range of leisure activities, including working and protected allotments, would be investments politicians should further, we think).

Innocent. Noting that the firm, which is behind the range of fruit smoothies, is not currently listed on the stock market, Barclays Stockbrokers praise the owners nonetheless for producing "a healthy product range and also for their progressive employment policies" and note that the owners "have talked about floating the company, 'to democratise the ownership'." (This is a vigorous and interesting company. We originally referred to it as Ignorant in view of some appalling advertising that mocked serious issues of the cows' welfare and conditions in the dire dairy industry. We had also made an appropriate complaint to the Advertising Standards Agency, this time for rank uncouthness, about ads for Irn Bru, and later, in a different vein, to Nestlé for their Nesquik ads. The ASA laughed all these complaints off, implying that we lack a sense of humor. Innocent seem to have taken our complaint seriously and to have changed their PR and claims accordingly).

JJB Sports. The HLS group identifies the need to buy more sporting equipment and clothing. JJB is "one of the very few large retail chains in the market and the only pure stock market player in this industry" (We see a much more important demand for skipping ropes, exercise balls, ballon elastic stretching materials, and wobble boards, as well as facilities for remedial therapy rather than turning sports gear into a lucrative sector of the fashion industry. The initiatives of the Beauty Without Cruelty movement took in challenges in clothing, equipment, and kit for sports and replacements for commodities such as leather and gut, for which plastic alternatives were developed for all levels of play. Avian flu has emphasized the importance of alternatives in badminton, for imports of shuttlecocks made in the Far East with duck or goose feathers have been unwelcome items of international trade. In the musical industry, alternatives have been developed, eg for the strings and keys of plucked, bowed, and fingered instruments.)

Marks and Spencer. "Continued strong performance noted for its Eat Well range, which is doing so well" (but to heretics like VEGA, M and S is to be boycotted for "buttering everything up").

Sainsbury's. Endorsed particularly for its active Kids initiative, which has succeeded in "getting children to take more exercise", moreover, "sales of organic products grew 17% in the first quarter of the year alone".

Whitbread. These days, "a hospitality company, with a range of hotels and restaurants." HLS commend the shares "because Whitbread owns the David Lloyd Leisure chain of health clubs, an obvious beneficiary of any increase in the exercise Britons take." (We'd like to know of more evidence of the hospitality actually reaching hospitals, schools, and public services, as well as furthering the R and D and innovation in the brewing industry for leavening developments in the production of foods and beverages and nutritional diversity. And whether the catering services offer a publicly failing provision for the passing traffic, who might need use of lavatories and washing facilities without being customers for the food or drink.)
Ethical Consumerism

15. The Independent, adding a rider, notes that "investment in the healthier lifestyle theme is just one way to benefit from the idea of ethical consumerism" and cites an opinion and example from Barclays Stockbrokers for other opportunities. The example offered refers to trial sales by Currys of solar panels for the home, with the opinion that "companies with investments in green products are likely to be beneficiaries of the parallel trend of healthier eating" - and gain perhaps in mutual benefits from a liking for healthy curries, we might add.

16. The ethical clothing company People Tree gave their opinion that the 25-40 age range was its core market, adding that "we are about how to source ethical clothes and materials." The company convinced Top Shop to start selling its ethical range in its flagship London store in March. "If 58% of young people said they didn't care, that's 42% who do and that's a very significant number", comment People Tree. Translating these observations into the ethical food context is difficult but interesting. Allowance has to be made for the nature of the questioning: statistics are easier to compile from primed questions and ticks in boxes than from spontaneous, undirected observations or from actual data from the market and correlations of the buying population with the goods they will own when they walk out of the store.

17. Overall, 76% of respondents said that an end to child labor and sweatshops was "a very important driver of ethical production; 60% said offering producers a fair price was important; and 50% wanted to reduce damage caused to the environment". Of respondents deeming ethical production of clothes important to them, 59% were women, of whom just over half (53%) declared that they would buy ethical clothes if they did not cost more. Those under 34 rated price more important than quality. M and S scored highest scores for ethics among high street retailers and "value fashion retailers" rated lowest.

18. Over-55s "have the greatest awareness of how garments are produced, with 36% looking for country of origin before making a purchase," continues the Guardian report, citing a definition: "Ethical clothes were defined as those not made by child labor or in sweatshops, for which the producers were paid a fair price, and where the environment was not damaged." Lack of awareness could be adduced as a reason for ignorance of the availability of ethical clothing, which was the case for a quarter of the respondents to questions asked in the survey. "Big retailers may have misjudged public demand: only 14% felt the use of organic fibre was a very important consideration," continues the Guardian's report, adding that "shoppers felt more strongly about treatment of people than material factors, such as organic production."  

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