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Food retailers slammed for trading practices

10-Feb-2004

Tesco, the UK's leading food retail group, is one of a number of leading companies in the food industry criticised this week for "driving down employment conditions for millions of women workers around the world" by the international agency Oxfam.

In a new report called Trading Away Our Rights, Oxfam criticises huge retailing 'empires' such as Tesco for "undermining the very labour standards they claim to uphold by using a common business model that demands ever-quicker and cheaper delivery of the freshest and latest products".

The agency, which also points the finger at Spanish retail group El Corte Ingles and US-based giant Wal-Mart, suggests that it is women workers who are the hardest hit by such practices. "Companies are using their power at the top of global supply chains to squeeze their suppliers to deliver. This pressure is dumped immediately onto women workers in the form of ever-longer hours at faster work rates, often in poor conditions and with no job security," Oxfam claims.

"This is where globalisation is failing in its potential to lift people out of poverty and support development," said the agency's Make Trade Fair campaign director Phil Bloomer. "There is a widening gap between the rhetoric of global corporate social responsibility and the reality of the corporate business model. Many corporations have codes of conduct to hold their suppliers accountable for labour standards, but their own ruthless buying strategies often make it impossible for these standards to be met."

Oxfam's report combines research from 12 employment-related campaigns across rich and poor countries, and interviews with more than 1000 workers, factory and farm owners, global brands, importers, exporters, union and government officials.

The report suggests that companies are outsourcing their production and using their dominant market position to drive cost and risk down their supply chains - not the first time, of course, that retailers have been accused of exerting too much pressure on suppliers in order to boost their own margins, but one of the few reports which looks at the impact on a global scale.

"Corporate buying teams have massive power to pressure their suppliers to deliver 'just-in-time' orders at lower prices," the report suggests. "Companies such as Tesco, El Corte Ingles, Taco Bell and Wal-Mart must radically alter the way they work with producers and in negotiating deliveries and prices," Oxfam claims.

Despite the steady rise in popularity of Fairtrade and other ethical food products in the UK, retailers there are for the most part happy to ignore any such concerns, according to the Oxfam report, which cites one former UK supermarket buyer as saying that "ethical trade just doesn't fit neatly into numbers so gets left out of the picture".

"The workers at the bottom of the global supply chains are helping to fuel national export growth and shareholders' returns - but their jobs are being made ever more insecure, unhealthy and exhausting and their rights weakened. This must change," claimed Bloomer.

Women workers are being hit especially severely, according to Oxfam. "Jobs in labour-intensive industries are celebrated as empowering women," Bloomer said. "While we welcome the fact that millions of women are getting a wage, the wage alone doesn't free them from poverty. Instead they're being burnt-out by working harder, faster, over longer hours and with few health, maternity or union rights. This is a poor strategy for improving women's lives."

But the retail trade is not the only culprit, according to Oxfam . "Many governments - encouraged by the World Bank, the IMF and big business - are also complicit as they continue to pursue laws and trade agreements that allow for deeper 'flexibilisation' of labour. This results in countries being pitted in competition to provide the most flexible workforce."

Bloomer gave the example of Chile, where it claimed that 75 per cent of women fruit-pickers were on temporary contracts working 60 hours per week in season yet earning, for the most part, less the minimum wage.

"This short-term advantage of trade is short-sighted and comes at the risk of a long-term cost to society," Bloomer said. "Improving employment conditions, on the other hand, would be a powerful catalyst for reducing poverty. It would strengthen an international trading system that is rightly being seen as failing the poor and would create new opportunities for investment, growth and development."

Tesco has thus far declined to comment on the accusations, but has always rigorously defended relationships with suppliers in the UK, where it has frequently been criticised by the likes of Friends of the Earth for squeezing farmers' margins to boost its own.

Tesco, like all food retailers, is clearly reliant on consumer goodwill to drive its business, and as such is always swift to defend its trading model against all accusations of this kind. But the company is also in a strong position in that while some customers may well choose to shop elsewhere as a result of Oxfam's claims, the majority of shoppers are concerned primarily about one thing only - how much their food costs.

As long as Tesco's British customers - or indeed its Thai, Hungarian or Irish customers for that matter - see no increase in the cost of their weekly grocery shop, most will be happy to turn a blind eye to exactly how Tesco keeps its prices so low - and it is that barrier of apathy which Oxfam will find the hardest to break down.

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