Lidl, Zara’s owner, H&M and Next ‘paid Bangladesh suppliers less than production cost’ | Retail industry

Lidl, Zara owners Inditex, H&M and Next have been accused of paying garment suppliers in Bangladesh less than they cost to produce during the pandemic, with factories failing to pay the country’s legal minimum wage. I am struggling with

In a survey of 1,000 domestic factories producing clothing for UK retailers, 19% of Lidl’s suppliers, 11% of Inditex, 9% of H&M and 8% of Next claimed so.

These four brands, as well as most of Tesco and Aldi’s suppliers, are still on the same page nearly two years after Covid-19 was declared a global pandemic, despite skyrocketing raw material and production costs. He told the researchers that he was being paid at the rate. temporary.

A study by the University of Aberdeen and Transform Trade, a UK-based fair trade campaign group, found that nearly half of Primark’s suppliers questioned had not seen an increase in payouts, and just over a third said their orders had been canceled. says. Known as the Traidcraft Exchange.

Their report, which looked at the period from March 2020 to December 2021, found that large brands that buy from 15 or more factories were more likely to experience problems such as late payments and canceled orders than smaller brands. I found that I was more likely to engage in unethical practices. These larger operators included members of the UK Ethical Trading Initiative, an alliance of companies, NGOs and unions set up to improve relationships with suppliers.

Fiona Gooch, Senior Policy Advisor at Transform Trade, is working with UK clothing retailers in a manner similar to the Grocery Supply Code of Practice, which oversees supplier-retailer relationships that sell more than £1 billion of food annually. sought a fashion watchdog to regulate the

“This study is a wake-up call,” she said. “Like existing protections for food suppliers, fashion watchdogs are needed to curb unacceptable purchasing practices of clothing retailers who profit from large consumer markets.

“Suppliers can provide good working conditions for their employees only if they can plan ahead with confidence that they will earn what they expect.”

In a response published in the report, Lidl said it was “committed to ensuring minimum wages in the supply chain and to ensuring sustainable pre-planning of textile production.”

“Lidl takes its responsibility to workers in Bangladesh and other countries where our suppliers produce very seriously and strives to ensure that core social standards are adhered to throughout the supply chain.”

Next said it “completely refutes the suggestion that suppliers are being paid the same (or less) than they were pre-pandemic.” It said its profit margins remained stable even as prices rose, indicating that it paid more to its suppliers.

Inditex said it has joined a global action to support the garment industry, including factory workers. The company said it “guarantied payment for all orders already placed and in production and worked with financial institutions to facilitate the provision of financing on favorable terms to suppliers.”

Primark has admitted it was forced to cancel some orders during the pandemic, when nearly all of its stores had to close for a period of time. But it said it tried to help the workers. If he turned over to us within 30 days of the cancellation, he would have received payment. ”

A Tesco spokesperson said: To ensure they continued to pay their workers fairly, they did not cancel orders, did not penalize them for late deliveries, and fully respected their terms of payment. ”

Aldi did not recognize in its report that the brand had been split into two completely separate businesses, Aldi Nord and Aldi Sud, which includes the UK chain, so the latter’s actions could not be clearly shown. said he couldn’t.

H&M declined to comment.

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