By Charlotte Eyre

Increased consumer sensitivity to ethical shopping will send the global fair-trade market rocketing to over £800m (€1,000m) by 2012, according to a new report.

The report, compiled by market analysts Datamonitor, indicates that ethical trading is a trend that the food industry cannot ignore, especially since many fair-trade operations relate to products such as tea, coffee and chocolate.

"Ethical consumerism will increasingly come to the fore as people shop for products they feel akin to politically, ethically and aesthetically," said report author Nick Beevors. "Consumers will choose brands that are actively making a difference in a transparent and trustworthy manner."

According to Beevors, worries over global warming and natural disasters, such as hurricane Katrina in the US, are one of the reasons why consumers turn to fair-trade products.

"Consumers are most concerned about climate change not just in an altruistic way regarding the fate of nature, but as genuine concern for human life and importantly, their own quality of life," he said.

Manufacturers can relate their ethical credentials through packaging and labelling, as the perception of authenticity and provenance is vital when it comes to selling the product, the report says.

However, Beevors also warns that companies must back up their claims with ethically sound policies to avoid a backlash to 'greenwashing'. "Transparency and trust will become an increasingly important currency," he said.

Fairtrade around the world

Out of the 10 developed countries reviewed for the report, the US had the largest fair-trade market in 2007, valued at £455.3m (€570.2m), Datamonitor said.

In Europe, the largest market was the UK with a value of £395m (€494.7m). The UK also spent the most per head on fair-trade products last year - £6.50 (€8.14) per capita.

At the other end of the spectrum, consumers in Italy, Spain, New Zealand and Japan all spent less then 50p (60.2 centimes) per capita on fair-trade goods.

However, some of these countries experienced the fastest growth rates between 2002 and 2007, with markets in Spain and New Zealand growing 184.3 per cent and 83.4 per cent respectively.