H&M commits to pay more to its Bangladeshi suppliers

Business Desk :
Hennes & Mauritz AB (H&M) has pledged to cushion increased workers’ wages in Bangladesh by raising the prices it pays to the country’s suppliers for apparel goods made in the country.
The Stockholm-based company told its readymade garment (RMG) providers in Bangladesh that it will “absorb the increase of the wages in our product prices,” after the government agreed to raise the minimum monthly wage by 56% to Tk12,500 ($113) from December, according to a report published by Bloomberg citing a letter.
“We support the development of fair and competitive wages in our supply chain and are working toward improving working conditions,” the retailer said in the letter.
The Bangladesh pay deal followed weeks of deadly protests as thousands of garment workers took to the streets to demand a higher wage increase than that proposed by the industry group.
Manufacturers in the country had feared the salary hike would eat into their profit margins as fashion retailers continue to pay the same prices for orders.
“I was very worried about the increased wages,” said Mostafiz Uddin, managing director at Denim Expert Ltd, who received the letter from H&M.
It’s a great relief for me and it will help me to ensure fair wages for the workers.” Uddin said, adding that he expected other brands to follow suit.
A spokesperson for H&M confirmed it had communicated changes in its purchasing practices to suppliers in a letter.
In a social media statement, Mostafiz Uddin also said that this is the third occasion on which H&M has increased prices following an increase in the minimum wage.
The company also did the same after previous minimum wage increases in 2013 and 2018.
“Leadership like this matters as it sets a standard for other fashion brands in the industry to follow,” he added.
Bangladesh has become the world’s second-largest RMG exporter after China, attracting the textile industry with rock-bottom wages.