Asda criticised for Bangladesh RMG sector crisis
Since coronavirus, over $3 billion worth of orders with factories in Bangladesh have been cancelled or paused, leaving suppliers unpaid for work that has already been completed
Asda, a British supermarket retailer, has been accused of being one of the fashion retailers leaving factory workers in Bangladesh to go hungry by cancelling or suspending garment orders without full payment.
The retailer has been targeted in a petition by anti-fast fashion activist group Remake, alongside Gap, C&A and Primark.
The petition says the retailers named have not yet promised to pay suppliers for all orders that were cancelled or paused as a result of coronavirus which has left millions of garment workers in Bangladesh jobless with no severance or access to healthcare, The Grocer reported.
According to Remake, Asda is refusing to accept a percentage of George orders and is imposing "enormous discounts" from 40-70% on suppliers for a proportion of orders that have not yet been completed.
"This is particularly disturbing when noting that Asda and Walmart have both been able to remain open during Covid-19 because of their food sales and are both presumably making a significant profit." said Remake.
Asda confirmed to The Grocer that it although it had asked suppliers for a discount, it was on less than 5% of its orders and all orders that have already been shipped will be paid for.
"We have long standing and valued relationships with our suppliers in Bangladesh and intend to honour over 95% of our annual orders with them – by taking ranges as planned, storing items until next year or reusing fabric in new designs." said an Asda spokesman.
"We want to help them weather this crisis and be in the best place possible to continue working with us once Covid-19 has passed and factories reopen. Where there is a small amount of product that we are not able to take from them at this time, we are proactively working with suppliers to agree to mutually cancel the order and pay a proportion of the costs within 7 working days, which is much quicker than standard industry terms, as well as agreeing suppliers can resell items or donate items.
"This approach during these unprecedented times gives our valued suppliers the benefit of an immediate cash injection into their business so that they may pay their workers, as well as starting to plan work on next seasons ranges with us and ensuring we continue to have a strong, sustainable supply chain for the long term."
Remake said it would not remove the named retailers until they promised to pay suppliers in full for orders that were cancelled or paused as a result of coronavirus without asking for discounts or extending payment terms.
"Bangladesh's garment industry accounts for 80% of the country's exports, making its economy and the livelihood of its population reliant on apparel orders from the United States and Europe," said Remake.
"Since the arrival of Covid-19, over $3 billion worth of orders have been cancelled or paused, leaving suppliers unpaid for work that has already been completed. Unless fashion brands like Gap, Primark, C&A, and others #PayUp, millions of garment makers will go hungry and be forced onto the streets."
However, both Tesco and Marks & Spencer have been named as retailers who have now committed to paying their garment suppliers in full and have been removed from the #PayUp target list.
Tesco responded directly to Remake to state that it would be "paying for every order that has been completed or is in production" and was "not changing payment terms or asking for discounts".