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12 Jan 2023

Naimul Karim, Financial Post

Bangladesh: World's largest clothing retailers underpay suppliers in the country to reduce costs, report reveals

"Big clothing brands squeezing Bangladeshi suppliers to offset inflation, study alleges", 12 January 2023

Some of the world’s biggest clothing retailers are offsetting surging costs for raw materials by squeezing their suppliers in Bangladesh, the world’s second-largest exporter of clothes, a new study by a group of British researchers alleges. The report, based on interviews with 1,000 Bangladeshi clothing manufacturers, states that about 70 per cent of the brands sourcing from these factories were paying suppliers about the same as before the pandemic, suggesting they have done little or nothing to help their suppliers offset surging costs of raw materials over the past couple of years, nor the burden of guarding against outbreaks of COVID-19.


H & M Hennes & Mauritz AB, Inditex SA’s Zara, Walmart Inc. and Gap Inc. were among the large international retailers that were named in the report. None responded to requests for comment.


In total, Bangladesh’s clothing industry faced deferrals and cancellations worth about US$3.7 billion in export orders by June 2020, according to the study, most of which were destined for Europe and North America. This in turn led to thousands of workers losing their jobs during the pandemic.