Major clothing brands are accused of unfair practices towards their suppliers in Bangladesh, such as cancelling orders, not paying, or paying too late, according to a study commissioned by the NGO Transform Trade.
The study, conducted by the researchers from the University of Aberdeen and the Centre for Global Development, focussed on 1,000 garment factories or manufacturers.
The practices identified began during the Covid-19 pandemic but have continued since then. Despite rising production costs since the global reopening of the economy, brands and distributors cancelled orders, refused to pay or demanded discounts for orders that were already in production or even shipped, the researchers said.
Major brands producing in Bangladesh, such as Inditex (parent company of Zara), Primark or H&M have all canceled about 30% of their orders, in addition to requesting discounts or delaying payments. Gap, Walmart and C&A did the same, but to a lesser extent.
Such unfair practices affect suppliers’ labour practices, resulting in job losses and lower wages, the study noted, adding that one-fifth of the factories reported that they were struggling to pay the minimum wage.
A regulator should therefore be established for the garment sector in developing countries to stop such practices, the study recommended.
