BD’s RMG factories were paid less than production cost: Study

Business Desk :
Large fashion brands sourcing clothes from Bangladesh for the UK market reportedly paid below the cost of production, according to a survey.
The survey was conducted on 1,000 Bangladeshi manufacturers and was published on Sunday.
The majority of Bangladeshi factories selling to 24 of the largest global retailers report the retailers paying the same prices almost two years on from the start of the pandemic, despite the cost of raw materials increasing.
Aberdeen University’s Business School carried out the research titled ”Impact of Global Clothing Retailers’ Unfair Practices on Bangladeshi Suppliers During Covid-19″ alongside trade justice charity Transform Trade and the report looked at the period from March 2020 to December 2021.
According to the research, 78 high street brands source from four or more factories and of them, 90% were reported as engaging in unfair practices. These practices included cancellations, failure to pay, delays in payment and discount demands, with knock-on effects including forced overtime and harassment.
Among them, 86% cancelled orders, 85% reduced prices compared with the ones agreed upon in the contract, 50% refused to pay for goods already in transit and production and 85% delayed payment for goods already dispatched for more than three months.
The research said that 50.7% of suppliers experienced unfair purchasing practices.
Larger brands buying from many factories including H&M, Zara, Next, Gap and Primark were engaging in unfair purchasing practices more frequently than smaller brands, suppliers told the surveyors.
Regarding the report, Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told that the incidents like order cancellation, discount demand and inability to pay due to the bankruptcy of many brands happened during the Covid-19 time.
 “Many brands have also offered lower prices saying they have reduced work orders,” he added.