Skip to main content
Home

Main menu

  • Home
  • Why ETI
    • Why join ETI
  • ETI Base Code
    • Base Code overview
    • Base Code clause 1: Employment is freely chosen
    • Base Code clause 2: Freedom of association
    • Base Code clause 3: Working conditions are safe and hygienic
    • Base Code clause 4: Child labour shall not be used
    • Base Code clause 5: Living wages are paid
    • Base Code clause 6: Working hours are not excessive
    • Base Code clause 7: No discrimination is practiced
    • Base Code clause 8: Regular employment is provided
    • Base Code clause 9: No harsh or inhumane treatment is allowed
  • Our approach
    • Membership
    • Programmes
    • Transparency
    • Meaningful Stakeholder Engagement (MSE)
  • Our expertise
    • Climate change & Just transitions
    • Crisis response
    • Gender equality in supply chains
    • Worker representation
    • Forced labour & modern slavery
    • Responsible purchasing practices
    • Human rights due diligence
      • HRDD legislation tracker
  • Resources
    • Guidance & reports
    • Blog
    • Case studies
    • Training
    • Events
    • Annual impact report
  • About ETI
    • Who we are
      • ETI's origins
    • What we do
    • Our members
      • Public reporting performance
    • Global presence
    • Governance
    • Our team
      • ETI Board members

Breadcrumb

  1. Home
  2. blog

Arcadia’s squeeze on suppliers

  • Jane Moyo
  • 18 January 2018
Garment factory worker © ILO-Aaron Santos

We express grave concerns over the news that Sir Phillip Green’s Arcadia fashion group is to pay its suppliers 2% less on existing and future orders.


ETI’s Executive Director, Peter McAllister said that the reported cuts, particularly to orders that have already been agreed, are “appalling” and “totally unacceptable within responsible business practice”.


He further said: “Unfortunately, Arcadia has ‘form’ for this type of action. They threatened exactly the same two years ago in August 2015.


“Yet evidence shows that workers and the most vulnerable groups in Arcadia’s supply chain will ultimately bear the impact of this decision to reduce prices paid to suppliers.


“These kinds of arbitrarily imposed terms represent exactly the type of poor purchasing practices fashion brands need to change.” 


“Suppliers operate on incredibly tight margins. Virtually the only costs they will be able to cut are to wages or to essentials such as health and safety provision.”


Supplier survey


Last year, ETI surveyed over 1,000 suppliers in conjunction with the International Labour Organisation. The survey confirmed that tight price negotiations have a definite impact on suppliers’ ability to pay appropriate wages:


  • 29% of suppliers said that buyers’ purchasing practices were likely to result in their workers having to accept wages below the cost of living.
  • 40% of suppliers said that they were likely to subcontract orders to other companies because of low order prices.

“Unauthorised subcontracting in particular,” Peter McAllister said, “is a real danger signal for poor practice”.


Peter McAllister also explained that at the heart of the survey sits the idea of developing fair, transparent, two-way relationships with suppliers.


“We and the ILO went straight to the horse’s mouth and spoke directly to suppliers.


“We asked suppliers to speak up. We wanted to ensure clarity over any contractual constraints they face in ensuring workers get a good deal."


Collaboration with suppliers


In a difficult business environment, there will be times when companies have to look at efficiency savings. But this should be done in collaboration with suppliers, not be diktat, Peter McAllister advised.


"Treating suppliers fairly underpins sustainable business for all," he said.


It is why ETI has published a Guide to Buying Responsibly.


It is also why ETI recommends that Arcadia’s suppliers submit a Better Buying review, this is a new online platform that allows suppliers to anonymously rank the buying practices of brands and retailers.


 


The above image is for illustrative purposes only and does not refer to a factory supplying Arcadia.

Stay up to date

Stay up to date with the latest from ETI via the following channels:
  • Email
  • Twitter
  • LinkedIn
  • Blog RSS

Related content

  • Common Framework for Responsible Purchasing Practices in Manufacturing Industries (CFRPP MI)
  • Responsible purchasing practices in manufacturing industries
  • Responsible Purchasing Practices - manufacturing case studies
  • ETI insights: Responsible Purchasing Practices – Driving change in manufacturing
  • Common Framework for Responsible Purchasing Practices in Food
  • TFG London: Strengthening supplier partnerships

Get the latest

Subscribe to our email newsletters and stay up to speed on ethical trade.
Subscribe

ETI elsewhere

  • Twitter
  • LinkedIn
  • YouTube

Footer

  • ETI Community
  • Accessibility
  • Contact
  • FAQ
  • Jobs at ETI
  • Press resources
  • Security & privacy
Other ETIs: Bangladesh, Denmark, Norway, Sweden
Ethical Trading Initiative | Registered No. 3578127