"German retailers step closer to Living Wages and Incomes in banana supply chains", 14 December 2021

In January of 2020 German supermarkets Lidl, Aldi Süd and Nord, Kaufland, Rewe, DM and Tegut signed a voluntary joint agreement on the promotion of living wages and incomes in their agricultural supply chains and formed the German Retailers Working Group on Living Income and Living Wages.

That vision took a step closer to reality...at a Kick Off event organised by the Initiative for Sustainable Agricultural Supply Chains (INA) at which the Working Group presented the activities of the pilot project on Living Wages in the banana sector.

Their vision for the banana sector

...Working Group members ALDI Nord, ALDI SÜD, Kaufland, Lidl, REWE Group and dm-drogerie markt have agreed to gradually integrate Living Wage criteria into their own brands’ entire banana portfolio...

Banana sourcing volumes complying with Living Wage criteria will be increased continuously over the next few years according to the following previously defined milestones:

First pilot project

Starting point for the implementation of the German retailers’ sector initiative is a pilot project in Ecuador. This first joint project acts as a pilot to understand, test and adjust viable approaches to promote living wages in banana supply chains. In addition, it serves as a blueprint to adopt and expand good practices in further sourcing countries beyond Ecuador...

Wage gap analysis as a foundation

...To obtain a comprehensive overview of the wage situation, Working Group members are analysing wage gaps for as many of their Ecuadorian supplier as possible using the IDH salary matrix and working in close consultation with suppliers and producers...by the end of 2022 additional reference countries are planned to be included in the wage gap analysis.

Closing possible wage gaps

If wage gaps are found on a plantation, retailers aim to contribute to closing the gap by paying an individual price premium. This is one of the core elements of the Living Wage criteria. The calculation and payment of the price premium will be done individually in relation to the particular wage gap and the quantities purchased by the respective retailer on the plantation.

To calculate the necessary price premium, while including producers and workers’ representatives, GIZ has developed the “Living Wage Costing Tool“...

Dialogue and cooperation for fair procurement practices

...the Working Group is collaborating closely with various standard-setting organisations.

...workers’ representatives and, where possible, trade unions are foreseen to be trained and strengthened on the farms that supply to working group members...

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