Impact of global clothing retailers’ unfair practices on Bangladeshi suppliers during Covid-19

Based on a survey of 1,000 Bangladeshi factories/suppliers1 producing clothes for global fashion brands and retailers, this research highlights reports of unfair trading practices encountered by manufacturers during Covid-19. Suppliers reported that retailers/brands 2 cancelled orders, refused to pay for goods dispatched/ in-process and demanded a reduction in price for orders already placed before March 2020. Since then, they further pressured the suppliers to reduce prices. Suppliers reported that in December 2021, despite the rising costs of inputs and the additional costs of Covid-19 mitigation measures, 70% of brands/retailers were still buying garments at similar prices to those in March 2020 from at least some of their suppliers.

More than 50% of factories reported at least one of the following four unfair practices by brands/ retailers: cancellation of orders, price reduction, refusal to pay for goods dispatched/in production and delaying payment of invoices. Such unfair trading practices impacted suppliers’ employment practices resulting in worker turnover, loss of jobs and lower wages. Importantly, one in five factories reported that they had struggled to pay the Bangladeshi legal minimum wages since the factories had reopened following the March and April 2020 lockdown.