Campaigners have called for a fashion watchdog to be set up to stop “unacceptable buying practices” uncovered by researchers, who named high street stores Zara and Primark among those treating suppliers unfairly.
In a survey of 1,000 Bangladeshi manufacturers, researchers found that big brands were paying below production costs, with most factories selling to major retailers paying the same prices despite rising raw material costs.
In research by the University of Aberdeen and the charity Transform Trade, published on Sunday, the authors of the report said that suppliers listed 1,138 brands with which they had contracts in February 2020, and of these, 37% were reported to have engaged in unfair practices.
More than half of suppliers said they had faced unfair purchasing practices, including cancellations, non-payment, late payments and discount claims, with consequences including forced overtime and harassment.
Fiona Gooch, senior policy adviser at Transform Trade, described the findings as a “wake-up call”.
“We need a fashion watchdog that will stop the unacceptable buying practices of clothing retailers who benefit from large consumer markets, in the same way as existing protections for food suppliers,” she said.
“Only when suppliers can plan ahead, with confidence that they will earn as expected, can they provide good working conditions for their workers.”
According to the report, Zara had 90 factories producing for the brand in March 2020.
The researchers said 31% of factories reported canceled or partially canceled orders, 27% had price reductions, 10% had orders that the company refused to pay for while in transit or production, and 30% reported that payment was delayed. at least three months.
Meanwhile, Primark, which according to the report had 35 factories working on products, canceled or partially canceled orders from 34% of factories surveyed, reduced the price of orders by 20% and 11% of factories reported late payments.
The study, titled Impact of Unfair Practices by Global Garment Marketers on Bangladeshi Suppliers During Covid-19, also says that a large number of companies buy from factories facing rising raw material costs and that nearly one in five struggle to pay Bangladesh’s £2.30 minimum wage During the day.
Larger brands that bought from many factories engaged in unfair purchasing practices more often than smaller brands, the supplier survey found, and every brand that bought from 15 or more factories was said to have engaged in at least one of these practice.
The survey also found that after the garment factories closed, they laid off a quarter of their workforce, which the report’s authors say suggests that up to 900,000 workers may have lost their jobs.
Garment manufacturing has become the most important manufacturing sector in Bangladesh, accounting for 20% of GDP. Employing about four million workers, more than 12 million depend on the sector for their livelihood, researchers say.
Ms Gooch said when “traders treat suppliers badly by breaching pre-agreed terms, it is the workers who suffer”.
“If the retailer doesn’t pay the agreed amount or is late, the supplier has to cut costs in some other way, and that’s often passed on to their workers who have the least power in the supply chain,” she said.
“Reports of re-employment with worse pay and conditions, bullying and unpaid overtime are the predictable result. We need a fashion watchdog to regulate clothing retailers in the UK, in the same way as the existing supermarket watchdog.”
Supermarkets have a Groceries Code Adjudicator, a watchdog that enforces a statutory code of practice which prohibits certain unfair buying practices by large retailers towards their food and grocery suppliers, regardless of location.
Primark and Zara have been contacted for comment.