Monday, 27 April 2009

Tesco Announce Record Profits

Last week Tesco announced record profits of £3 billion for the last year, a staggering figure in today’s economic climate.

What Tesco failed to mention was the nature of their business practices which are responsible for generating such huge sums of money and perpetuating the race to the bottom.

Only in December, the War on Want campaign group released a report into the working conditions of Bangladeshi factory workers who produce clothing for Tesco, Asda and Primark.

Their report, which looked into six factories in the country, found that workers were manufacturing these corporations’ cheap produce for a pittance, for long hours and with few worker rights.

On average, workers received wages of £19.16 for a 48 hour week, less than half the minimum living wage the same workers calculated to be at least £44.87.

The top end of the wage scale was no more than £24.37 and one worker earning this sum, Runa, said: “My pay is so meagre that I cannot afford to keep my child with me. I have sent my five-month old baby to the village to be cared for by my mother.”

Not only is the pay appalling, but workers are also expected to work long hours and long weeks.

In Bangladesh, the standard working week is defined as 48 hours, over six days, with a maximum allowance of 12 hours overtime.

The War on Want report found that most employees were working between 10 and 14 hours a week and forced overtime to meet tight deadlines was commonplace.

One worker, Farzana, said: On several nights a month I have to work until 3 o’clock in the morning, alongside my regular shifts spanning up to 12 hours a day.”

Furthermore, abuse of workers was also found to be prevalent, with many women victims of sexually related language and other abuse.

Since a military-backed caretaker government took power in 2007, trade unions have been under the cosh from the government, with many banned or severely restricted in what they can do.

In one instance, 100 workers involved in a sit-in protest about back pay were baton charged by police in the Dhaka export processing zone (savaged by Naomi Klein in ‘No Logo’).

The amazing thing is that this is actually the second report from War on Want, following a 2006 report into the same factories. This earlier report found similar circumstances of worker abuse and little has changed in the meantime.

The Bangladeshi government did raise the national minimum wage, but in light of a 70% hike in the price of rice, and a 30-60% rise in the cost of other essential food stuffs like oil, wheat and flour, this has already been devalued.

Tesco and its ilk will point to their involvement in the Ethical Trading Initiative, a voluntary and flimsy program that ‘ties’ participants to a code of conduct.

This lip service is undermined by their pursuit of fast fashion – an effort to get fashionable items in the shops no more than six weeks after they’re revealed on the catwalk.

These short lead times put enormous pressure on suppliers and subsequently their workers to deliver the goods in time, leading to the long hours mentioned above.

When the report was released, Tesco gave War on Want an earbashing, calling the claims ‘unsubstantiated’ and demanding they reveal their sources (as if they would). However, they didn’t bother to present any evidence to contradict the report.

It’s not only in Bangladesh where Tesco bullies suppliers though. Andrew Simms showed in his book Tescopoly how Tesco use their massive bargaining power to force suppliers into selling their produce at stupidly low prices in South America, Africa and even the UK.

Simms also highlighted Tesco’s dealings with local planning authorities to push through applications to build new stores which are ultimately to the detriment of local communities, forcing the closure of many smaller, independent stores.

He also looked at the treatment of workers in their direct employment, not to mention the frightening Big Brother-like capabilities of their Clubcard system and broader, expanding services such as insurance and pharmacies.

Simms goes into far more detail than I can cover here but it's worth a read. Watching Armando Ianucci’s ‘Time Trumpet’ when Tesco invade Denmark, you’ll realise he wasn’t far off the truth.

So next time you buy a pair of pants from Tesco (or Asda or Primark) or indulge in out of season strawberries and other such fantastic food, think about that £3 billion profit and from where these ludicrous figures arise.

Visit the Tescopoly Alliance website

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