Factory owners in Bangladesh are calling on British supermarkets to reinstate cancelled clothing orders as food sales in Britain continue to boom.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) says the five largest supermarket chains - Tesco, Sainsbury’s, ASDA, Morrisons and Aldi - have told suppliers they will not pay for more than £75 million of orders that they placed.
Cancellations at Tesco, the UK’s biggest supermarket, are estimated to be in excess of £43 million.
It called on the British government to intervene to prevent clothing manufacturers from going under.
“It’s a question of lives and livelihoods in Bangladesh and the [supermarkets] should act honourably,” Rubana Huq, President of the BGMEA, told ITV News.
”If they don’t reinstate [orders] then it’s going to be disastrous,” she added.
“I think if supermarkets are making profits, if their businesses are booming then there is no excuse for them not to pay us, or even ask for a partial discount or cancellation.
"I think it’s absolutely unfair if they don’t pay.”
UK supermarkets source clothing from countries like Bangladesh, Cambodia, Sri Lanka and Vietnam because labour costs are cheap.
More than four million people work in clothing factories in Bangladesh. According to the BGMEA, the average worker earns approximately £88 a month.
For just over a year, Jannat Akhter has worked at a garment factory in Dhaka which supplies Sainsbury‘s and at least one other British retailer.
The factory closed on March 16.
She was paid in full (£78) at the end of March but claims she’s since been laid off.
”We are living in a terribly uncertain situation right now,” she told us.
“If we don’t have jobs we won’t be able to pay the rent or feed ourselves.
"My family consists of five people, and there are lots more like us.”
According to the latest data, published yesterday by Kantar, spending on groceries in the UK in the four weeks to April 19 was up more than £525 million on the same period last year.
All of the major supermarkets reported very strong growth in sales.
Tesco (up 7.2%), Sainsbury's (up 8.4%), ASDA (up 3.5%), Morrison (4.3%) and Aldi (8.8%) are all befitting from a surge in demand for food.
Supermarkets undoubtedly face higher costs.
In-store cafes are closed, sales of own-label food to go are down and clothing sales have fallen sharply.
But supermarkets have been able to continue to sell clothing in-store.
All other specialist clothing retailers have been forced to close their shops during the lockdown as clothing is considered a “non-essential” item.
The supermarkets also stand to benefit from the government’s decision to cancel business rates for 12 months.
Tesco alone says it will save £585 million.
Shafiq Hassan is the managing director of Echotex which has a clothing factory in Dhaka, employing 11,000 people.
He is based in London.
Hassan says Debenhams, which is in administration, has offered to pay him just £15,000 for the £150,000 of clothing that he has already shipped and has cancelled orders worth £400,000.
Debenhams has said it will pay suppliers in full for future orders placed but Hassan says he feels he’s been treated “despicably” and he won’t work with the company again.
Debenhams told us it has had to make “tough decisions” but it is dealing with suppliers “fairly and openly”.
Hassan says H&M, Inditex and Primark have promised to honour in full the orders they’ve made.
Sainsbury’s initially said it would cancel or put on hold £12 million of orders it had placed with Echotex but the supermarket has since decided it will now take everything.
“I don’t think we would have survived had we lost [that work],” Hassan told us.
“I think it would have been absolutely catastrophic for us if Sainsbury’s actually did cancel and walked away from us but we never actually thought they’d ever do that.
“Thinking about the long term has got to come into it,” he insists.
“Compassion has got to come into it, humanity has to come into it, empathy has got to come into it.
"We are talking about a country like Bangladesh facing catastrophe and the most important part of this has to be the people who make the clothes, they're the ones who are vulnerable.”
Sainsbury’s said the BGMEA’s allegations were “entirely incorrect” and that “we have cancelled a very small fraction of [the £20 million that] has been suggested”.
Sainsbury’s insists it will pay for products suppliers have already produced.
Part-made orders will be paid for only once completed.
Where suppliers have already paid for fabric for Sainsbury’s it says it will cover the cost.
A spokesperson for Tesco said: “We are committed to paying for every order that has been completed or is in production.
"Any claims about cancelled orders are completely wrong.
“We are not changing our payment terms or asking for discounts, and we will also use most of the fabric suppliers have already bought in anticipation of future orders.”
In a statement, Morrisons said: “We have changed our orders so that we don't have unsold items of clothing being wasted.
"This is being done in a responsible way.
“For example, if manufacturers have already cut a finished garment for Morrisons then we will continue to buy it."
Asda insisted “we are honouring over 95% of our annual orders with our suppliers in Bangladesh.
"Where there is a small amount of product we are unable to take we are working collaboratively with suppliers to mutually agree to cancel the order and pay a proportion of costs within 7 working days.”
An Aldi spokesperson said: "We have not cancelled any orders from Bangladesh and continue to take products from our clothing suppliers."
The Bangladesh Garment Manufacturers and Exporters Association insisted that the figures it has provided are accurate.
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