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“The Low Price” of the textile discounter KiK – consequences for labour conditions in textile factories in Bangladesh: Difference between revisions
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“The Low Price” of the textile discounter KiK – consequences for labour conditions in textile factories in Bangladesh (view source)
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===== The Bangladeshi garment and textile Industry ===== | ===== The Bangladeshi garment and textile Industry ===== | ||
“Since 1990, Bangladesh has experienced a spectacular growth in the area of clothing and textiles. Whereas the value of exports amounted to 600 million US dollars in 1990, this rose to nearly eight billion US dollars in 2006. The reason: Bangladesh is one of the poorest countries in the world and, in the past, with favourable customs regulations, was able to export clothing to Europe and the USA without quantitative restrictions. However, in other countries, the bulk buyers, in accordance with the Agreement on Textiles and Clothing of the World Trade Organisation (WTO), restricted imports through quotas. Bangladesh was able to take advantage of this trading advantage, in order to establish itself alongside the textile giants China, India and Hong Kong on the world market.”<ref>Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf (p. 29).</ref> The export products of Bangladesh shifted from raw material, like jute, and jute products (90%) to clothes based on cotton. The problem is that cotton has to be imported first before it can be part of the garment production. “Bangladesh’s clothing industry did not collapse after the phase out of the Agreement and its preferential treatment.” “In most factories, labour laws are being massively violated. Thus, the extremely low wage level is the main reason for contracts with buyers from the EU and the USA not being lost. Low wage costs make it attractive, i.e. cheaper, for buyers to allow production to continue in Bangladesh – at the cost of the workers, who, with these wages are barely able to survive.” <ref>Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf (p. 30)</ref> | “Since 1990, Bangladesh has experienced a spectacular growth in the area of clothing and textiles. Whereas the value of exports amounted to 600 million US dollars in 1990, this rose to nearly eight billion US dollars in 2006. The reason: Bangladesh is one of the poorest countries in the world and, in the past, with favourable customs regulations, was able to export clothing to Europe and the USA without quantitative restrictions. However, in other countries, the bulk buyers, in accordance with the Agreement on Textiles and Clothing of the World Trade Organisation (WTO), restricted imports through quotas. Bangladesh was able to take advantage of this trading advantage, in order to establish itself alongside the textile giants China, India and Hong Kong on the world market.”<ref>Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf (p. 29).</ref> The export products of Bangladesh shifted from raw material, like jute, and jute products (90%) to clothes based on cotton. The problem is that cotton has to be imported first before it can be part of the garment production. “Bangladesh’s clothing industry did not collapse after the phase out of the Agreement and its preferential treatment.” “In most factories, labour laws are being massively violated. Thus, the extremely low wage level is the main reason for contracts with buyers from the EU and the USA not being lost. Low wage costs make it attractive, i.e. cheaper, for buyers to allow production to continue in Bangladesh – at the cost of the workers, who, with these wages are barely able to survive.” <ref>Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf (p. 30)</ref> | ||
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==== The discounter KIK and its methods ==== | |||
===== In general : How discounter determine the prices ===== | |||
"The retail houses and discounters have developed enormous economic power. They are able to determine the prices and are interested in keeping them down. Producers in Asia, Latin America and Eastern Europe are powerless. They have to swallow whatever the corporations dictate.”<ref>Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf (p. 8)</ref> | |||
“In 1992, Germans spent 64 billion Euros on clothing, but only 56 billion Euros in 2005. This lower expenditure, however, does not mean that, in terms of volume, less is actually being purchased. Indeed, the very opposite is the case.” “In other words, we are consuming<br>more, but more cheaply. More and more goods are on offer for ever-decreasing prices.”<ref>Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf (p. 10)</ref> | |||
“The largest discounters pay their suppliers up to 15-20 percent less for their goods than normal department stores (ActionAid,2007, p.16). Because of the great amounts of goods they can order, they are able to force down purchasing prices to an enormous extent.”<br>”Suppliers in developing countries are becoming increasingly dependent on a few multinationals and their importers. With continually decreasing prices, they force down wages. Ultimately, it is the garment workers in the factories who suffer.”<ref>Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf (p. 10)</ref> | |||
“The phase-out of quotas led to price reductions and strong competition among the poor countries that export clothing and whose national income is heavily dependent on exports.” “The poor countries, competing to retain their clothing industry, try to offer the lowest wages. If, however, one looks at the various cost components from the viewpoint of the buyer/company, wages only account for 0.5-1 percent of the ultimate selling price of the product, as the following chart illustrates. In contrast, marketing and advertising, as well as the profit for the company in Germany/ Europe amount to about 25 percent of the endselling price. An increase in wages is, therefore “peanuts” in the eyes of the buyer.” <ref>Who pays for our clothing from Lidl and KIK? Published at Kampagne für Saubere-Kleidung (Clean Clothes Campaign; CCC). Published as brochure at January 1st, 2008: http://www.saubere-kleidung.de/downloads/publikationen/2008-01_Brosch-Lidl-KiK_en.pdf (p. 13)</ref><br><br> | |||
=== References<br> === | === References<br> === | ||