Ending Exploitation in Supermarket Supply Chains

Part of the debate – in the House of Commons at 12:21 pm on 18th October 2018.

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Photo of Kerry McCarthy Kerry McCarthy Labour, Bristol East 12:21 pm, 18th October 2018

I was not actually aware of that point, so I thank my hon. Friend for bringing it to my attention. I am very concerned to hear that that is the case.

As I was saying, supermarkets now keep as much as 50% of the money their customers spend, while the share that reaches workers and food producers has fallen, sometimes to less than 5%. Oxfam’s research has found a direct correlation between drops in the prices paid by the supermarkets to suppliers and the risk of increasing human rights violations in supply chains. This is basically propelling a race to the bottom on wages and rights. Slavery and labour exploitation typically happen towards the bottom of supply chains, where things can get very murky and there is a lot less transparency. It is not just the cost savings that are not passed down; there is also a greater risk in that we are much more likely to see pesticide poisonings and other health and safety violations.

For example, the import price for pineapples from Costa Rica to Germany, primarily for supplying Aldi and Lidl, fell by about 45% between 2002 and 2014, despite increasing production costs. Oxfam has documented conditions on two pineapple farms in Costa Rica, which included poverty wages, subcontractors demanding monthly commissions, penalties or dismissal for workers who wanted to organise, and pesticides being sprayed while workers were in the fields.

There are other unfair practices that contravene the groceries supply code of practice’s principle of fair dealing. Fairtrade’s research into the banana sector found that banana farmers bear the cost if the retailers’ forecasts are wrong. In the worst instance, banana farmers reported receiving late changes to orders in 40 out of the 52 weeks in the year. Feedback Global has revealed the unrealistic specifications buyers use to reject produce from vegetable producers in Kenya, where on average 30% of production is discarded at farm level and another 20% prior to export—that is 50% of their produce—largely on cosmetic grounds. There is virtually no domestic market for these crops and alternative buyers cannot be found at short notice.

What can we do about this? For a start, we as consumers can do more. We can buy Fairtrade, which is the only initiative that requires a minimum price for producers and has a mandatory trader standard. We can use our consumer power to demand more of our supermarkets, using the Oxfam “Behind the barcodes” scorecard to track their progress. As the chief executive officer of Divine Chocolate has said:

“We live in times where, on the one hand, the turnover of the world’s biggest supermarket group is higher than the Gross National Income of Norway or Nigeria, and, on the other, where most of the world is dependent on smallholder producers for at least 80% of its food. Supermarkets have a responsibility to those producers, and we have more power than we think to call them to account.”

The food sector can certainly do more. In the EU, just 10 supermarket groups account for over half of all food sales. Just 50 food manufacturers account for half of all global food sales. If they act, that will make a huge difference.