40% of factories have accepted orders at below cost © Ahmed Salahuddin/NurPhoto via Getty Images
40% of factories have accepted orders at below cost © Ahmed Salahuddin/NurPhoto via Getty Images

Fashion retailers 'must improve purchasing practices'

30 November 2020

Fashion retailers have been accused of aggressive price negotiation tactics with suppliers and changing orders at the last minute.

report by Oxfam Australia and Monash University looked at the practices of 10 brands or retail groups that sourced products from garment factories in Bangladesh.

Researchers carried out more than 150 surveys and 22 interviews with factory owners, production managers, merchandisers, supervisors, factory workers, unionists, economists, and NGOs in Bangladesh to compile the report.

Among the practices retailers were accused of in the report were inaccurately forecasting orders, imposing short lead times and making last-minute changes to orders.

The report said: “Oxfam is calling on brands to act urgently to improve their purchasing practices to reduce their exposure to human rights risks in their supply chains and improve the lives of the women making our clothes.”

Retailers were asked to rate themselves according to several criteria and were also given an independent factory rating by researchers.

H&M received the best rating of the group, with a self rating of “very good” and an external rating of “good” to “very good”, which corresponded to a score of 3.5 out of four.

Big W, Kmart and Target Australia were the next best performers, receiving a factory rating of 2.5 out of four – which placed them just below “very good” on the report’s scale.

Just Group and Mosaic Brands came out worst with “poor” or “very poor” factory ratings given by the external evaluators.

Best&Less, Big W, Kmart, Cotton On, Myer, The Just Group and Mosaic Brands were found to have sourced clothing from suppliers that scored low for their commitment to paying a living wage, the report found.

Lyn Morgain, Oxfam Australia chief executive, said: “One of the things that the factory owners have talked about is that where the forecasting of brands is poor, either they order too much or too little, factories themselves having to manage that problem.

“And often times they do it in ways that either requires excessive overtime or push down the already terribly low wages of workers.”

Two-fifths (40%) of factories canvassed said they had taken orders at below the cost in order to meet a brand’s minimum standards.

All of the factories interviewed by Oxfam said brands invariably ended relationships with factories or switched factories if a factory would not agree to a lower price demand, despite brands claiming this was not the case.

Myer, The Just Group, Inditex and Mosaic Brands were said to be the least transparent of those evaluated when it came to regularly updating their website with the names and addresses of at least 70% of supplier factories or 80% of the total value of supply chains.

Mosaic Group questioned the methodology used by researchers to compile the report.

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