Picture credit: Eric Miller/ Panos/ ActionAid UK
"I get 378 Rand [£32.50] pay every two weeks. I can't afford school fees for my daughter or go to school functions or buy school uniforms"
- Tawana Fraser, who works as a 'permanent casual' labourer on a pear farm that supplies Tesco (ActionAid)
“They called us all to a meeting and they said that we would all be laid off the next day. Then they rehired us for almost half the wages. We used to have almost a month holiday but this went down to 14 days"
- Costa Rican banana worker on a plantation supplying Tesco (ActionAid)
Who is paying the real cost of supermarket price wars?
Given that the major supermarkets now control nearly 80% of the UK groceries market if producers overseas want to get into the UK market, they have to deal with supermarkets. Supermarkets take the same approach with these suppliers as they do in the UK are used their enormous buying power to put pressure on farms and factories in poor countries to lower their prices and deliver goods ever faster and at shorter notice. This pressure on suppliers to provide more for less is passed on to workers in the form of low wages, job insecurity and poor working conditions.
Worldwide Tesco buys and sells around 20 million boxes of bananas a year from Latin America, the Caribbean and West Africa. Most of these are from plantations where workers do not earn a living wage and where workers have inadequate protection from the toxic chemical hazards used on industrial-scale plantations.
Research by ActionAid found workers in Costa Rica producing bananas for export to all major UK supermarkets earning 33p an hour - a wage so low that they cannot afford to take an hour off when dangerous pesticides are being sprayed on the crops. Plantation conditions are harsh with workers toiling 10 -12 hours in unbearable heat up to 6 days a week. Many workers fail to earn a ‘living wage’ to cover their basic needs such as housing, food, clothing and education Click here to see who gets what in a conventional banana supply chain (image from Banana Link).
In countries like Costa Rica, Tesco's most important source of bananas, the company has started to work on tackling some of the issues affecting workers on the plantations from which it buys. Tesco has sought, for example, to get the Costa Rican industry to resolve problems of systematic violations of the right for workers to join trade unions. These efforts need to be strengthened and extended beyond bananas.
Until recently, of all the tens of thousands of products they sell, bananas have been the biggest single contributor to profits for British supermarkets. However, retail price wars, often led by Tesco's main UK competitor Asda/WalMart have brought down consumer prices by up to 50% in the last few years. When Tesco reduces its own banana prices, it squeezes the price it pays its suppliers. Inevitably, workers have been the first to suffer from prices which have been cut by over a third as banana suppliers squeeze whatever costs they can to keep such a big customer.
Cheap wine comes at a cost. While supermarkets make profits selling wine in the UK, wine workers in countries like South Africa are left to pay the price.
The South African wine industry exports over 300 million litres of wine a year and now ranks as the world's ninth largest wine-producing country. The UK is by far the largest importer of South African wine, accounting for over 30% of wine exports by volume. Yet despite the commercial success of South African wine, Human Rights Watch's 2011 Ripe with Abuse report documents conditions of “on-site housing that is unfit for living, exposure to pesticides without proper safety equipment, lack of access to toilets or drinking water while working, and efforts to block workers from forming unions”. War on Want also conducted an investigation of conditions and published the 2009 "Sour Grapes" report.
Many wine workers come from the poorest sections of society and suffer from low wages, harassment and lack of housing. Due to the volatile nature of the wine market and the immense power wielded by major supermarkets, South African wine workers must also contend with irregular employment and face the constant threat of sudden dismissal. Women and migrant workers are particularly at risk as they are more likely to be on seasonal contracts, as well as suffering from discrimination in terms of pay.
Since 2005 ActionAid has worked alongside their South African partner organisation Women on Farms to improve the working conditions of women fruit pickers in South Africa supplying Tesco ("Rotten Fruit:Tesco profits as women workers pay a high price"). Their exploitation is largely caused by low prices and tougher standards being forced on local fruit farmers by international buyers such as Tesco. In 2007, ActionAid UK in partnership with Women on Farms, enabled a South African farm worker, Gertruida Baartman to attend the Tesco AGM. She asked Tesco Chairman, David Reid and shareholders about her poor working conditions, including exposure to harmful pesticides and wages of just 38p per hour. Since then, Tesco has agreed to introduce a more participatory system of auditing for its farms, which ActionAid and Women on Farms will continue to monitor to ensure it forces Tesco to take action.
In Latin America, and in particular Costa Rica, pineapple production has been a major issue in the Make Fruit Fair campaign. For just 4% of the value of the fruit, workers are subject to poverty wages, long hours, union repression, gender discrimination and health impacts from working with toxic chemicals
In July 2010, War on Want, IUF and Unite published a report on supermarket tea production in Kenya and India, A Bitter Cup. The report concludes that little improvement has taken place in tea plantations over the past 40 years with poor wages, conditions, and desperate insecurity of workers.
The International Union of Food workers (IUF) had investigated living and working conditions on the large Talup plantation in Assam, India, in 2009. The IUF claimed that this plantation supplied tea for Tesco's Finest blends. The plantation management clearly failed to apply even the minimum requirements of the Indian Plantation Labour Act of 1951. Download Tesco's finest tea - produced in far from finest conditions? and read more here.