According to a research released this week, major international fashion labels act unfairly toward Bangladeshi clothes suppliers, with some “purportedly paying for goods below the cost of manufacturing”.
The study’s authors, Aberdeen University and the advocacy group Transform Trade, surveyed 1,000 Bangladeshi textile factories during the Covid outbreak as they produced clothing for major brands and merchants worldwide.
At least one of the following occurred in more than half of the factories: price drops, order cancellations, payment refusals, or delayed payment for goods.
The study discovered that “manufacturers reported unfair trading practises during COVID-19,” according to the report. According to the report, such actions led to decreased wages for the factory workers, job losses, and a high staff turnover rate.
Due to this, one in five factories admitted they had difficulty paying the legal minimum wage in Bangladesh.
The study also identified instances in which certain businesses wanted discounts for apparel purchased prior to the outbreak of the pandemic in March 2020. And despite skyrocketing costs and rife inflation, some fashion companies refused to lower their prices.
In order to enhance purchasing procedures, the report recommended that importing nations establish a regulatory body for the fashion industry.
Major brands including H&M, Next, Primark, and Zara owner Inditex were among the companies with the “largest proportion” of unfair business practises, according to respondents.
The study also featured several companies’ reactions to the allegations.
According to Inditex, it has “assured payment for all orders already placed and in the manufacturing stage and worked with financial institutions to allow the provision of loans to suppliers on advantageous conditions.”