• An extensive list of Australian brands cancelled, delayed and undercut pricing on orders made to manufacturers in garment factories in Bangladesh, according to an SBS investigation.
• Garment manufacturing accounts for 80% of all exports in the country.
• The investigation reveals how cut-throat pricing in the Australian market had implications for those making the clothes thousands of kilometres away, Oxfam Australia chief executive Lyn Morgain said.
• Visit Business Insider Australia’s homepage for more stories.

During the pandemic, the companies that own a massive huge bulk of Australia’s clothing brands cancelled orders to manufacturers in Bangladesh, decimating its manufacturing industry.

According to a new investigation by SBS’s “Dateline”, Bangladesh’s factories have borne the brunt of the pandemic’s hit to the Australian retail sector, as Australian companies cancelled orders and delayed shipments to a country where garment manufacturing accounts for 80% of all exports.

As the global fashion industry reckons with the destruction of its business model post-pandemic, Australian brands are seeing increased scrutiny around harmful practices normally hidden from consumers.

The investigation reported findings by the manufacturers association in Bangladesh (BGMEA) that show that an extensive list of Australian brands cancelled or delayed orders as of April 2020, including Just Group and Australian department store Myer.

Another retailer, Mosaic Brands, which owns Australian labels including Rivers, Millers and Katies in March 2020 suspended and delayed shipment of around $US 600,000 worth of goods that were already made, and cancelled an order worth close to $US500,000.

The company said it was responding to a once in a generation global pandemic, adding that its manufacturer in Bangladesh continues to choose to work with the company.

While it also said it “adhere(s) to a number of internationally recognised social compliance measures to ensure worker safety, the avoidance of modern slavery and an ethical supply chain,” the investigation serves to highlight how fashion’s supply chains tip the power balance in favour of wealthy countries, able to define terms and exploit those at the bottom.

It also highlights that past commitments made by Australian companies haven’t been met.

In 2019, Oxfam Australia reported that Australian fashion brands were paying overseas workers 62 cents an hour and failing to commit to living wages, and listed names of fashion brands that have failed to make commitments ensuring payment of living wages workers making their clothes in countries like Vietnam or Bangladesh.

At the time, Oxfam Australia chief executive Lyn Morgain said the research revealed how cut-throat pricing in the Australian market had implications for those making the clothes thousands of kilometres away.

“The research reveals unfair purchasing practices are pressuring factories into adopting poor working conditions and paying unacceptably low wages,” Morgain said.

Global push to redesign broken fashion ecosystem post-pandemic

Since the pandemic shuttered retail businesses and essentially halted the inexorable momentum of the fashion industry, essentially overnight, industry leaders have been debating how the fashion sector might be reimagined.

Writing in the Washington Post, fashion journalist Robin Givhan said the problems facing the industry are caused by short-term fixes instead of long-term strategies, which had led to the current glut of fast and eternally updated practices of the fashion industry.

“Fashion stakeholders “created a system no one liked but no one seemed able to escape,” she wrote.

However October 2020 saw the first signs of action from the global fashion sector; 60 global fashion companies signed on to The Fashion Pact, which was launched by luxury conglomerate Kering’s CEO.

The initiative is the largest yet to corral a significant cross-section of the industry to commit to targets to reduce the sector’s environmental impact.

CEO of the Australian Retailers Association Paul Zahra told Business Insider Australia he expects many businesses will change the way they operate to mitigate risks in the supply chain.

“Our experience underlines the need for economic stability and growth,” he said.

Zahra also said the association has recorded shifts in the approach of Australian retailers, with an increased focus on the demands of customers and expectations of consumers generally.

“We have also seen consumer trends shift throughout the pandemic, including directing spending to their local small businesses, or buying Australian.”

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