Animal welfare charity Compassion in World Farming has announced that it is stripping the Cooperative Supermarket of its Good Chicken Award, in light of the retailer's decision to go back on a pioneering welfare pledge.

The Cooperative group is struggling, and is expected to post unprecedented losses later this month, mostly due to trouble in its banking arm, which was narrowly rescued from collapse late last year.

The supermarket has gone back on a decision to reduce stocking densities for its poultry suppliers. As a result, Compassion in World Farming has rescinded its Good Poultry Award, presented to the supermarket in 2010.

Compassion estimates that Co-op's welfare pledge improved the living conditions of 50 million chickens every year while it was in force. The group is urging its supporters to contact the Cooperative and demanding that it abandon plans to reduce stocking densities.

A statement from the charity read, "Although their increased crowding level is within legal requirements – and indeed better than many other retailers – their change of mind is a backward step for chicken welfare from one of the leaders in the field."

The Cooperative had previously committed itself to only stocking chicken reared up to a density of 30kg live birds per square metre, but earlier this month moved up to 34kg/m2. This is equivalent to an extra two birds per square metre, increasing the number of birds from 15 to 17 per m2

Though this rate still compares favourably with others in the industry (Red Tractor demands a maximum of 38kg/m2), Compassion claims that the retailer's backpedalling risks setting a precedent and eroding ethical considerations.

Dr Tracey Jones, the charity's Director of Food Business, commented, "The Co-op has traditionally been a leader in higher animal welfare but ... We cannot ignore that the company is now reneging on the promises it made in 2010."

The retailer pointed out that higher welfare chicken is still available through its premium range, and claimed the decision was made in order to provide its customers with British poultry at a lower price.  

However, Compassion said the Co-op appears to be sacrificing animal welfare commitments in response to its own poor business performance. Dr Jones continued, "Chicken meat has become so much of a commodity it is difficult to connect it with the living animal and the cheap price has eroded our ethical value of its life. It's time to reconnect people with the broiler chicken and to increase the demand for sustainable higher welfare chicken meat from food companies. By paying a little more, by eating less and wasting less, meat can be produced to higher welfare standards, which is affordable for all."

Last week the Cooperative announced that it had set in motion a process that will lead to the sale of its farming operations. The Cooperative's 14 farms have a history stretching back almost 120 years and are used to grow cereals, fruit and vegetables for sale in the group's supermarkets.