What’s actually wrong with supermarkets?
ActionAid is concerned that UK supermarket's growing power over their supply chains, and therefore the millions of women who produce their goods in developing countries, has grown rapidly in recent years. This growth has not been matched by appropriate rules to govern how they act and protect the basic rights of women workers. Supermarkets demand lower prices, faster delivery times, and greater flexibility from suppliers. ActionAid has seen first hand the impact on the poorest workers when supermarkets wield this power.
Suppliers from developing countries have little choice but to sell through supermarkets chains if they want to reach our markets, as only four stores (Tesco, Asda, Sainsbury’s and Morrisons) control access to the majority of British shoppers. Currently, supermarkets are only accountable to their shareholders. They must be obliged to reduce their damaging impacts on communities and the environment as well as make profits for shareholders.
And what do we think would be better than the status quo?
Supermarkets would need to look and behave radically differently if we want to move to a fair and sustainable food chain. If supermarkets stopped misusing their power and gave poor communities and workers a fairer deal instead, this would transform the lives of the women who produce goods for the big chains. The supermarkets' own efforts to clean up their supply chains is failing, which is why ActionAid wants legally binding rules to ensure supermarkets trade more ethically with producers and workers in the developing world.
Why do we need more regulation?
Supermarkets have said they'll clean up their act voluntarily for 10 years now. But ActionAid's experience shows women in developing countries who produce goods for supermarkets continue to work in shocking conditions. The examples of good practice, like Sainsbury’s going 100% fairtrade on bananas, are very isolated, so we now need minimum, legally enforced standards to make improvements to all the products they sell.
How is more regulation going to help poor people?
Many multinational companies are now more powerful than some countries. Some, like Wal-Mart and Unilever, regularly record profits that are bigger than the economies of countries where they do business.
While foreign companies can bring new jobs, technologies, investment and economic opportunity, all too often they exploit people by abusing the rights of poor communities, workers and destroying the environment. We need legally binding rules in place to ensure that companies behave responsibly wherever they work to benefit poor communities and the environment. Better regulation would help protect the basic rights of poor people in developing countries and in the case of supermarkets, enable them to claim their rights and work for a better future.
How can we control what people are paid in developing countries - isn’t it up to their governments?
Governments in developing countries have the main responsibility for ensuring worker’s rights are respected, including the right to a living wage. But, when UK supermarkets buy goods produced in poor countries, they should ensure their own business model does not make it impossible for farm and factory suppliers to pay their workers a living wage and ensure decent working conditions. We have a responsibility to ensure UK companies act responsibly around the world, so the UK’s ethical footprint is one of decent work and conditions for people, not exploitation and misery.
Why single out supermarkets now?
Right now we have an opportunity to get real change to curb supermarkets’ misuse of their power. In 2008, the Competition Commission recommended an independent, proactive ombudsman to monitor and enforce a new Groceries Supply Code of Practice.
By preventing supermarkets abusing their massive power over suppliers, an ombudsman would give farmers and workers who produce the food we eat a chance to improve their pay and conditions. It would also give supermarket shoppers more confidence that all of their goods have been traded in an ethical way.
It is now clear that there is cross-party support to create this ombudsman. But supermarkets are lobbying hard to water it down, and it is absolutely crucial to make sure the watchdog is set up with the powers needed to stop the rot.
ActionAid is campaigning to ensure that the next government establishes an independent, proactive ombudsman that will allow farmers to make anonymous complaints.
