Major World Cup sponsors, adidas & Nike, accused of paying "poverty wages" to women workers in their supply chains
A new report by Éthique sur l’étiquette and Clean Clothes Campaign, "Foul Play", accuses adidas and Nike, major sponsors of the 2018 World Cup, of paying poverty wages to the thousands of women in their supply chain that sew the football shirts and shoes of players and supporters.
The report says that while the top teams will receive record breaking amounts in sponsorship from Nike & adidas, the wages of workers in their supply chain will not follow this upward trend. The report states much of these brands’ sportswear is produced in Indonesia: "where 80% of garment workers are women and earn between 82 and 200 euro per month. Their wages often do not even cover basic needs, and is much less than would enable them and their families to have decent lives, which according to calculations by Asia Floor Wage would amount to 363 euro."
The article below contains statements from Nike and adidas.
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Adidas and Nike pay record-breaking amounts to footballers, but deny decent wages to women stitching their shirts
Author: Clean Clothes Campaign
While millions of people are getting ready to cheer their favorite teams during the Football World Cup, a report by Éthique sur l’étiquette and Clean Clothes Campaign, ‘Foul Play’, reveals that adidas and Nike, major sponsors of the global event, pay poverty wages to the thousands of women in their supply chain that sew the football shirts and shoes of players and supporters. The World Cup is the main stage for adidas and Nike’s intense competition for sponsorships. Together they sponsor 22 out of the 32 teams. Over the last decade, budgets for marketing and sponsorships have doubled in value. In a record-breaking new contract, the German team will even receive 65 million per year from adidas until the next World Cup, which is three times as much as under the previous contract that expires this year. The French national team negotiated a no less astonishing 50.5 million sponsorship with sports giant Nike.
Author: Kieran Guilbert, Reuters
The share of what Adidas and Nike spend on making a pair of shoes that goes into workers’ pockets has fallen since the early 1990s, said the Clean Clothes Campaign (CCC), citing a shift in manufacturing from China to cheaper countries such as Indonesia...“The brands decided to spend their money on football players rather than on the workers stitching their shirts and shoes.” Nike said its suppliers must pay their employees at least the local minimum wage or prevailing wage, including premiums for overtime worked and legally mandated benefits. “We remain invested in conversations with governments, manufacturers, NGOs, brands, unions, and factory workers to support long-lasting, systemic change,” a Nike spokeswoman said. Germany’s Adidas said it adhered to safe working conditions and fair wages throughout its supply chains, and obliged suppliers to pay at least the minimum wage required by law. “The average monthly take-home wage of production workers in the facilities Adidas works with in Indonesia is currently well above the current minimum wage,” an Adidas spokeswoman said.
Author: Éthique sur l’étiquette & Clean Clothes Campaign
The apparent contradiction between the creation of downstream value and the precarious situation of garment factory workers can be explained by the business and financial model of sportswear makers Nike and Adidas. The central objective of this model is the maximization of profits in order to generate greater and greater returns for shareholders, as evidenced by the extraordinary dividends paid to shareholders each year (as high as 10% of gross revenue in the case of Nike). Nike has thus become a shining example of stock market success that its competitors strive to emulate: the company boasts a performance 70% above the Dow Jones Industrial Average and its market capitalization now more than triples its revenue (around 95 billion euros). Its rival Adidas has a market cap of nearly 43 billion euros, double its annual turnover. In order to achieve such a remarkable level of performance, sportswear brands’ business and financial model relies not only on growth, but also on cost control/reduction, and in certain cases on strategies to minimize their tax burden.