New survey of UK fashion manufacturers reveals experience of unfair purchasing practices

Results from a survey of UK clothing manufacturers, analysed by academics from the University of Nottingham, the University of Leicester and the independent trade justice charity Transform Trade, have revealed that unfair purchasing practices by brands and retailers are common-place within the garment manufacturing industry.

Manufacturers reported brands paying late; making last-minute changes to orders, not paying for the changes, then fining manufacturers for late delivery; and demanding extra price reductions even after production has started.

Dr Sabina Lawreniuk, Principle Research Fellow and human geographer in the University of Nottingham’s School of Geography, who led the Nottingham evaluation, said: “Our research shows that current brand purchasing practices directly impact workers, resulting in precarious and insecure work across UK factories.

The findings highlight the transfer of inappropriate risk from retailers and brands to manufacturers. These include:

• 31 per cent of manufacturers reported brands cancelling orders.
  
  
• 78 per cent experienced brands not covering the costs for last-minute changes they made to previously confirmed orders.
  
  
• 75 per cent reported brands not adjusting price to account for increases in minimum wages.
  
  
• 67 per cent experienced brands quoting for large orders, then reducing the size but keeping unit cost the same.
  
  
• 44 per cent reported brands making regular requests for payment extensions; 10 per cent experienced order payments being delayed more than three months past originally agreed terms.
  
  
• 31 per cent reported penalties for being late when the brand caused the delays with order changes after contract.
  
  
• 29 per cent reported brands insisting on discounts after entering into a contract.

Manufacturers reported the impact of these practices being passed onto workers. Reporting increasing overtime to fulfil sudden increases in orders (73 per cent), reducing employee hours due to cancellations (58 per cent), and workforce terminations (29 per cent) in response to sudden contract changes.

The findings show the minimal faith respondents had for institutional routes for dispute resolution - with only 22 per cent pointing to the legal system as holding a viable route for redress, 21 per cent court action, and no manufacturers considering government, multilateral or multistakeholder initiatives a viable route. Respondents consistently highlighted financial and legal barriers to disputes, noting that they “haven’t got the money to challenge” and that “any legal comeback is way beyond our means,” indicating that pursuing formal dispute mechanisms is often unaffordable.

With no viable available avenue for redressal, the experts advise that Government action is needed to address unacceptable brand behaviour, undertaken by brands benefiting from the UK consumer market. Adding, that in the UK, a Garment Trading Adjudicator (also referred to as Fashion Watchdog), needs to be established, similar to the Groceries Code Adjudicator which curbs the unacceptable purchasing practices of the UK’s largest food retailers.

Hilary Marsh, Garment Policy Advisor at Transform Trade, added: “This report is just another piece of evidence of these practices that rule the industry. A Fashion Watchdog would enforce fair business practices for the sector.”

More information is available from Dr Sabina Lawreniuk in the School of Geography, via sabina.lawreniuk@nottingham.ac.uk