• A new report from Oxfam has called out the buying practices among retailers that are affecting clothing manufacturers in Bangladesh.
• These included claims to switch suppliers if a factory didn’t drop their prices.
• “With just one month today until Christmas, shoppers should demand big brands end this cycle and do better in the way they do business,” Oxfam Australia CEO Lyn Morgain said.
• Visit Business Insider Australia’s homepage for more stories.

A new report from Oxfam has uncovered a range of poor buying practices among retailers that operate in Australia, that are impacting clothes manufacturers in Bangladesh.

The “Shopping A Bargain” report found practices such as aggressive price negotiation, short lead times and last minute orders that are negatively impacting workers at these clothes manufacturers.

“The research reveals unfair purchasing practices are pressuring factories into adopting poor working conditions and paying unacceptably low wages,” Oxfam Australia Chief Executive Lyn Morgain said in the research.

“It found that these poor purchasing practices of brands are making it impossible for factories to increase wages, despite many of the same brands making public commitments to ensure the payment of living wages. Instead, wages are trapping workers – mainly women – and their families in a cycle of poverty.”

Conducted together with Monash University, the research involved more than 150 surveys and 22 interviews with factory owners, workers, union leaders, NGOs and brand representatives.

It looked at the purchase practices of 10 top fashion retailers operating in Australia that get their clothes from manufactures in Bangladesh. These included Best & Less, Big W, Cotton On, H&M Group, Zara’s parent company Inditex, Just Jeans’ parent, The Just Group, Kmart, Myer, Target Australia and Mosaic Brands, the company behind Noni-B.

The survey results were gathered to determine a rating of purchasing practices from both clothing brands and factories where they bought clothes from. H&M Group was the top ranked retailer by the factories, followed by Big W, Kmart and Target Australia. The worst performers were The Just Group and Mosaic Brands.

According to the report, Australia’s fashion industry was worth more than $22 billion in 2019/2020, with most of the clothes available online or on shelves made in factories in countries like Bangladesh, China, India, Indonesia and Vietnam. And around 80% of people who work in these factories are women.

There were a series of practices the report highlighted from the factories surveyed, one of which was how brands would end their relationship or change factories if suppliers can’t meet their demand for a lower price. All factories surveyed mentioned this practice, despite brands claiming they rarely or never do so.

Another practice that eight of 10 manufacturers pointed out was how brands would often put pressure on them to reduce prices. In some cases companies would tell factories about the prices they were offered by other factories, or would tell factories to “take it or leave it” on prices.

In the research, 40% of factories said they accepted orders below the price it cost to make them safely and ethically. On top of that, 70% said they needed employees to work overtime to deliver orders that exceeded forecasts on time.

The research was done months prior to the coronavirus pandemic but when it hit, it caused flow on effects that affected clothing manufactures. Morgain said some major Aussie brands either cancelled orders, delayed payments or sought discounts for items that were already produced.

A report from the ABC in March found that Mosaic Brands informed suppliers it would delay payment on some orders by eight months.

“Almost overnight, hundreds of thousands of garment workers were stood down without pay during the pandemic, leaving them facing the risk of extreme poverty,” Morgain said.

While Morgain acknowledged that retailers have made public commitments to ensure women making clothes are paid a living wage, she said these are yet to come into effect.

“Oxfam is calling on Australian brands to develop and publish responsible purchasing policies and to ensure that labour costs are ‘ringfenced’ in negotiations with factories – that is, separately calculated to ensure the payment of living wages to workers,” she said.

“And brands that are lagging behind need to take the step of making a public, credible commitment to living wages,” she added.

“With just one month today until Christmas, shoppers should demand big brands end this cycle and do better in the way they do business – in turn giving real meaning to their commitments to end poverty wages for the women making our clothes.”

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