Finance News

Exporters have sold clothes at a lower price than the cost

The world’s major brands and retailers have imported garments made from factories in Bangladesh at prices lower than the cost of production. There have been incidents during the two years of the Corona period, when the cost of production was on the rise due to the increase in the price of raw materials. Again, the factories had to spend extra to control the corona infection at that time.

Such information has emerged in a joint survey conducted by the University of Aberdeen in Scotland and the UK-based trade justice charity Transform Trade. The survey was conducted from March 2020 to December 2021. 1000 ready-made garment factories of Bangladesh participated in this. Of these factories, 19.6 percent are small, employing between 1 and 120 people. 57.9 percent of factories are medium, whose number of workers is from 121 to 1000 thousand. And 22.5 percent factories are big. Their number of workers is over one thousand.

59.1 percent of the factories participating in the survey manufacture knitwear. The remaining 30.2 percent factories manufacture oven garments. The rest do both oven and knit. In March 2020, 7 lakh 89 thousand workers were working in the factories. At that time, the factory was closed for three weeks due to Corona. Then the number of workers decreased to 5 lakh 89 thousand. In December 2021, the number of workers increased again to 7 lakh 19 thousand.

The 1,000 factories in Bangladesh that participated in the survey produce garments for 1,138 brands and retailers. Among the foreign buyers, 78 companies import garments from four or more factories in Bangladesh. Notable buyers include – Aldi, Asda, H&M, Gap, C&A, LPP, Next, Primark, Tesco, Zara, US Polo, PVH, Mango.

The results of the survey were published on Sunday. Factories participating in the survey claimed in December 2021 that raw material and equipment prices have increased in the 21 months since the start of Corona. The cost of taking various measures to protect workers from Corona has also increased. Still, 70 percent of brands and retailers are still paying the same prices they would have bought in March 2020. Again, 9 percent of brands and retailers paid less than the cost of production. 76 percent of factories surveyed have experienced the same or lower prices for garments.

According to the survey data, brands and retailers offering prices below cost of production include—Aditya Birla Fashion, C&A, H&M, Zara, Kik, Lidl, LPP, Next. On the other hand, the same given apparel prices as of March 2020 are among brands and retailers—Aditya Birla Fashion, C&A, H&M, Aldi, Best Sellers, Zara, Kyabi, Kik, Lidl, Mango, Tesco, Target, Primark, OTTO, LPP etc. .

Apart from this, more than 50 percent of the garment factories that participated in the survey claimed that their business partner brands and buyers have committed four types of unfair practices during the two years of Corona. These include cancellation of purchase orders, price reductions, non-payment and late payments. Because of this, the income of workers has decreased, and many have even lost their jobs. Big brands have done these things more than smaller brands. Brands that buy clothing from 15 or more factories have committed at least one of these four injustices.

Professor Mohammad Azizul Islam of the University of Aberdeen Business School said that in the first two years of the start of Corona, the workers of the garment industry in Bangladesh did not get enough wages to live. One in five factories struggled to pay workers the minimum wage. But this time, many brands and consumer organizations have made profits by using the labor of Bangladeshi workers.