H&M, Zara Treat Bangladesh Suppliers Unfairly, Report Finds — Retail Bum

Findings from a recent study conducted by the University of Aberdeen and U.K. fair trade group Transform Trade indicate that during the pandemic, Zara’s parent company Inditex, H&M, Lidl, and Next underpaid garment suppliers in Bangladesh.

The situation left garment factories in the country struggling to pay the legal minimum wage, with 19% of Lidl’s suppliers, 11% of Inditex’s, 9% of H&M’s, and 8% of Next’s suppliers being paid less than the cost of production. To make matters worse, suppliers were unable to pass on additional costs associated with rising material prices and COVID mitigation measures to their buyers.

Even today, many of the country’s 1000 suppliers are being paid the same rate as what they were being paid between March 2020 to December 2021.

The report also found that larger retailers are particularly more likely than smaller ones to engage in bullying tactics such as canceling orders and delaying payments.

“This research is a wake-up call,” said Transform Trade’s Senior Policy Adviser Fiona Gooch. “We need a fashion watchdog to stop unacceptable purchasing practices of the clothing retailers benefiting from large consumer markets, along the same lines as existing protections for food suppliers.”

“Only when suppliers are able to plan ahead, with confidence that they will earn as expected, can they deliver good working conditions for their workers.”

Originally published at https://retailbum.com on January 13, 2023.