23 April 2007

 
Action Aid has published a report on supermarket buying power which draws on examples of the banana, garment and cashew nut supply chains. It concludes that the huge power and purchasing practices of big multiple retailers in the UK needs to be regulated.

 

Despite the constructive voluntary initiatives taken by some British retailers in response to consumer pressure, such as Sainsbury's shift to 100% Fairtrade bananas, it is clear that not all retailers are ready to make the changes necessary to ensure responsible practices along their thousands of supply chains. As the report highlights, it is the plantation or factory workers in producing countries who are the direct victims of irresponsible buying practices and unfair prices. Women workers tend to suffer disproportionately. In the case of the banana industry, employers are taking on less and less women on the grounds that they are more expensive to employ, because of the legal requirement to respect their maternity rights.
 
The renewed banana retail price wars of April 2007 demonstrate that there is a limit to voluntary action and that fairer competition can only be ensured through regulation. Asda/Walmart's 20% cut in the retail price of bananas means that the chances of making the urgently needed improvements in wage levels and working conditions at the beginning of the supply chain are very considerably reduced. The other problem is that all major retailers feel obliged to follow Asda/Walmart's lead. In so doing the progress of recent months towards Fairtrade certification - and therefore fair prices to producers - is threatened. In previous price wars led by Asda, the report shows how the supermarket's suppliers cut labour costs in their Costa Rican plantations. There is no guarantee whatsoever that the latest war will not lead sooner or later to the same situation for already overstretched and exploited workers.

Read the report.....