Tesco, Primark cashing in on recession with ‘poverty profits’

By staff writers
April 21, 2009

Leading British retailers Tesco and Primark are today accused of cashing in on the recession with cheap fashion sales by exploiting overseas garment workers.

The accusation comes as the latest financial results of both companies are announced this morning. Tesco is set to top £3 billion full-year profits and Primark’s owner, Associated British Foods, expected to reveal a half-year surge in the retailer’s profits.

The Church of England is amongst those seeking to profit from Tesco. According to the last Annual Report from the Church Commissioners, it had a shareholding worth £48 million in the company.

The charity War on Want condemned both companies for driving down labour costs from suppliers whose employees pay a high price through poverty pay and worsening living standards.

War on Want's research, published in December, showed that workers producing clothes for Tesco and Primark in the Bangladeshi capital Dhaka, earn as little as 7p an hour for up to 80-hour weeks.

Some employees receive only the minimum wage, £13.97 (1663 taka) a month, far less than the £44.82 (5333 taka) needed for nutritious food, clean water, shelter, clothes, education, health care and transport.

The average workers' pay, £19.16 (2280 taka) a month, represented less than half a living wage.

Amid food and fuel inflation, employees' living standards had fallen since War on Want interviewed them two years earlier.

Last June, the charity and the group Labour Behind the Label, reported that workers making Tesco clothes in the Indian city of Bangalore struggled on less than £1.50 a day for a 60-hour week, with higher rice prices making life even harder.

Employees in the factory earn on average £38 a month and the lowest paid receive just £30. The Bangalore Garment and Textile Workers' Union calculates a living wage as at least £52 a month.

Simon McRae, senior campaigns officer at War on Want, said: “Tesco and Primark are thriving by selling cheap clothes while the workers producing them are paid a pittance. Despite the retailers’ continued promises, wages remain well below living costs for garment workers and their families.”

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