Monika Buening of the Federal Consumer Affairs Agency said the two companies needed to take action fast to limit the damage.

"The fashion chains (H&M and C&A) were not vigilant enough, " the Frankfurter Rundschau newspaper quoted her as saying in its Saturday edition.

Buening demanded the clothing chains must now "disclose their supply chain" and "inspect their certifiers better, at least by conducting random checks."

Rebecca Harms, a member of the European Parliament for Germany's Green Party, called for tighter controls on organic textiles from the developing world.

"Consumer fraud"

Environmental organization Greenpeace called for a legal investigation into the matter.

The organization's agricultural expert, Martin Hofstetter, told German radio station MDR that some products which had not been organically produced, were being sold as such.

"This is a major malpractice. It's consumer fraud, which must be punished," he said.

The problem with organic cotton from India primarily involves the small structures of the farming sector, Hofstetter said.

He pointed out that many small fields in the country were often clustered together in close proximity to each other, cultivating a variety of different crops – organic, conventional and GM. That often resulted in crop contamination from one field to the other, he said.

On Friday, German newspaper Financial Times Deutschland reported that last year, a large volume of GM cotton produced in India had been sold as organic cotton.

The newspaper said Indian authorities had discovered the incident in April 2009. It quoted the head of the Indian agricultural authority, Apeda, Sanjay Dave, saying they were dealing with fraud on "a gigantic scale."

Two European certification companies, responsible for ensuring that producers stick to eco-friendly standards, had awarded the organic label.

The newspaper said it remained unclear whether the certifiers, a Dutch and a French company, had knowingly and falsely labeled the cotton as "organic."

Setback to clothing firms

A spokeswoman for the Swedish clothing chain H&M told news agency AFP that the company became aware of the incident last year. She said it couldn't be ruled out that the tainted cotton had landed in H&M's organic range.

Clothing retailer C&A, which has head offices in Brussels and Duesseldorf, has announced it planned to carry out a thorough investigation.

The controversy could have serious implications for both firms at a time when companies are trying to profit from jumping on the organic bandwagon.

In fact, H&M is set to launch its spring "Garden Collection" in March, which the chain says "is made using organic and recycled materials."

rb/AFP
Editor: Sonia Phalnikar