Major international fashion brands are operating unfairly toward Bangladesh clothing suppliers, with some allegedly paying for items below the cost of production, according to a study published Wednesday.
The study’s compilers, Aberdeen University and the advocacy group Transform Trade, surveyed 1,000 Bangladeshi factories making garments for global brands and retailers during the Covid pandemic.
More than half of the factories experienced at least one of the following: order cancellations, refusal to pay, price reductions or delayed payment for goods.
“This research highlights reports of unfair trading practices encountered by manufacturers during Covid-19,” the report found.
Such practices resulted in lower wages for the factories’ workers, job losses and high staff turnover, it said.
This research highlights reports of unfair trading practices encountered by manufacturers during Covid-19
One in five factories revealed they had struggled to pay the Bangladeshi legal minimum wage as a result.
The report also uncovered incidents where some companies demanded reductions for clothing ordered before the pandemic erupted in March 2020.
And some fashion firms refused to budge on price, despite soaring costs and rampant inflation.
The study called for the creating of a fashion industry regulator in importing nations to improve purchasing practices.
Respondents told researchers that the “highest proportion” of unfair business practices included major brands such as H&M, Next, Primark and Zara owner Inditex.
The responses of some companies to the claims were included in the report.
Inditex said it has “guaranteed payment for all orders already placed and in process of production and worked with financial institutions to facilitate the provision of loans to suppliers on favourable terms”.
German supermarket chain Lidl said it took the “accusations very seriously”.
It added that it “takes its responsibility towards workers in Bangladesh and other countries where our suppliers produce very seriously and is committed to ensuring that core social standards are complied with throughout the supply chain”.
Primark said that owing to the pandemic, it had taken “the incredibly difficult decision in March 2020 to cancel all orders which had not yet been handed over”.
Companies named in the report did not immediately return AFP requests for comment.
HENNES & MAURITZ (isin = SE0000106270)
NEXT (isin = GB0032089863)
INDITEX - ZARA (isin = ES0148396015)