LONDON: 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.
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 prices, despite soaring costs and rampant inflation.
The study called for the creation 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.
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I'm an expert in global supply chain dynamics, particularly in the fashion industry, with a deep understanding of the challenges faced by clothing suppliers and manufacturers. My expertise is grounded in extensive research, industry analysis, and a keen awareness of the intricate relationships within the global fashion supply chain.
Now, regarding the article you provided on major international fashion brands allegedly operating unfairly toward Bangladesh clothing suppliers, I can shed light on several key concepts:
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Unfair Trading Practices during Covid-19:
- The study conducted by Aberdeen University and Transform Trade highlights the impact of unfair trading practices on Bangladeshi garment factories during the Covid-19 pandemic.
- These practices include order cancellations, refusal to pay, price reductions, and delayed payment for goods.
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Consequences on Workers and Factories:
- The report emphasizes that such unfair practices resulted in lower wages for workers, job losses, and high staff turnover.
- One in five factories struggled to pay the Bangladeshi legal minimum wage due to these practices.
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Demand for a Fashion Industry Regulator:
- The study recommends the creation of a fashion industry regulator in importing nations to improve purchasing practices.
- This regulator is envisioned to address and prevent unfair trading practices within the industry.
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Major Brands Implicated:
- Respondents identified major international brands such as H&M, Next, Primark, and Zara owner Inditex as allegedly engaging in unfair business practices.
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Responses from Companies Named:
- Inditex stated that it guaranteed payment for all orders and worked with financial institutions to provide loans to suppliers.
- Lidl expressed seriousness about the accusations, emphasizing its commitment to ensuring social standards compliance.
- Primark mentioned the difficult decision to cancel orders in March 2020 due to the pandemic.
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Call for Accountability:
- The study underscores the need for accountability in the industry and calls for measures to prevent and address unfair practices.
These insights reflect the complexities and challenges faced by suppliers and workers in the global fashion supply chain, and they underscore the importance of ethical and responsible practices within the industry.
