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August 30, 2008

UK organic food sales drop as consumers cut spending costs

Organic food sales have fallen more than at any time in the last decade as shoppers try to cut costs and experts warn that consumers are more confused than ever about whether it is worth paying the higher prices.

Figures collected by the market research company TNS show spending on organic food and drinks fell from a peak of nearly £100 million ($200 million) a month earlier this year to £81m in the most recent four-week period recorded. The fall has been steepest in eggs, but is also reported in the most popular sectors, including dairy, fruit and vegetables and chicken.

Some farmers are quitting organic production to cut costs and others appear to be delaying meeting the standards necessary to enter the market - leading to concerns that it could take longer to build up sales when demand recovers.

The figures will be seized on as further evidence of the pressure on consumers struggling to balance household budgets, and will raise questions about how willing people are to pay for higher environmental and other ethical benefits.

"We're certainly seeing a dip, the question is: is [it] a dip that's bouncing back again or it could be the start of a real drop," said Edward Garner, of TNS.

The National Farmers Union said members had reported falling demand, particularly in organic eggs and chicken.

"I was talking to somebody in the NFU [and] they were saying it's happening in beef and everywhere because at the end of the day it's a nice-to-have, not a need-to-have," said Charles Bourns, chairman of the NFU's poultry board.

The Soil Association, the organic industry lobby group, said its figures, which are dominated by smaller producers, showed some decline, not a dramatic fall, but admitted that there were worries about whether people would renew home box deliveries when they return from summer holidays.

"I predict [demand] will plateau a bit but not decline," said Helen Browning, the association's director of food and farming, who said she believed most organic buyers would stay loyal and top quality producers should not be affected.

"These values are important to people still - the concern about the way we farm, the way the countryside is under threat at times, about animal welfare," she said.

The Guardian

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