Work should lift people out of poverty but far too often wages and incomes are systematically too low for a decent standard of living. Oxfam’s Behind the Barcodes campaign shines a spotlight on the conditions of the women and men who work to produce the food we buy from our supermarkets. These workers who are at the bottom of global food value chains often can’t earn enough to meet even basic needs and experience extreme hardship.
Oxfam has long engaged food and agricultural companies, including supermarkets, to ensure that they take responsibility to address the barriers to paying a living wage for all workers in their supply chains. This is why we welcome the new commitments by Tesco to contribute more towards delivering living wages to all the workers who produce the bananas that Tesco sells.
A living wage is defined as the wage received for a standard work week that is the minimum needed to afford a decent standard of living in a specific location for the worker and her or his family. A living wage gap is the difference between actual wages and living wages. A living wage is considered the floor, not the ceiling.
Tesco’s Commitment for Banana Producers
From January 2022, banana suppliers whose workers are currently earning less than a living wage will receive a financial contribution from Tesco. Tesco’s contribution, which can only be used towards closing the living wage gap, will be at a rate which is proportionate to the volume of bananas the company sources from that supplier.
A growing number of companies are starting to make commitments on living wages and living income for their supply chain workers and producers. But the approach taken often fails to address the company’s own business practices, or the commitments lack specificity and ambition as in the case of living wage commitments made by some German and Dutch supermarkets.
Tesco’s commitment is commendable because it shows Tesco taking on responsibility for ensuring that its core business activity is better aligned with its human rights commitments and delivering outcomes for workers. Tesco is embedding living wage into its purchasing practices by financially contributing to fill living wage gaps where they exist, and by committing to reward suppliers who progress in this area with increased business. The retailer also recognises the critical importance of freedom of association and collective bargaining in determining and maintaining living wages.
Tesco’s stated ambition is that, from January 2024, they will only source from banana producers who pay a living wage to all workers no matter the volume that is sourced by Tesco. Because many of Tesco’s suppliers also sell bananas to other retailers and buyers, Tesco says that it is “calling on other buyers across the sector to join us and support suppliers to increase wages for the lowest paid workers.”
Commitment to Action
Oxfam agrees that wider industry action is crucial. Retailers in the food sector (and beyond) must join forces to address the barriers to achieving living wages throughout their supply chains. As the UK’s largest supermarket, Tesco’s living wage commitment paves the way for other supermarkets to step up and follow suit.
We urge Tesco, and other businesses, to ensure their suppliers listen to the experiences of all their workers, including their elected representatives and agency, temporary and migrant workers who are often overlooked. This should include working closely with trade unions and elected worker committees – and incorporating gender-specific steps in their living wage action plans to tackle the barriers that are holding so many women back. Tesco’s recent commitment to work with all their direct food suppliers to achieve at least 30 per cent of supervisory and management roles to be occupied by women by the end of 2025, is a step in the right direction.
The question remains when will supermarkets discontinue their retail price wars? Low prices on popular products can be used to attract customers into their shop, but can put unsustainable economic pressure on all other actors in the supply chain. Bananas end up in the shopping baskets of most UK consumers and therefore the banana sector in particular has suffered from these price wars. The average retail price for bananas in the UK has fallen by more than 50% in real terms over the past 15 years. The commitment to ensuring that shoppers can continue to pay cheap prices for one of their favourite items has had damaging consequences on the other actors in the supply chain, with virtually no margin left to invest in safe and dignified conditions for the plantation workers.
With supermarkets beginning to step up to their responsibilities, we look forward to seeing progress as commitments are translated into positive outcomes for the millions of workers who produce our food.
Author’s Bio:
Radhika Sarin is Private Sector Senior Adviser for Oxfam and has been engaging with supermarkets on human rights issues as part of the Behind the Barcodes campaign