The British Retail Consortium (BRC) “totally refutes the suggestion that retailers are responsible for worker exploitation” following a scathing Channel 4 Dispatches documentary which delved into the impact the competitive grocery sector is having on the supply chain.
The programme, titled ‘Supermarkets: The Real Price of Cheap Food’, which aired on Channel 4 yesterday (4 August) suggested that workers are suffering from the price-war between supermarkets as those that pick, pack and manufacture the food supplied are often subject to questionable hygiene and health and safety practices and find themselves on zero-hour, minimum-wage contracts.
The government put in place measures to regulate the supply of workers to the agricultural and horticultural industries which supply supermarkets. The Gangmasters Licensing Authority requires that all employment agents - gangmasters - who provide laborors to work in those fields to be licenced by the authority.
However, the documentary featured one fruitpicker who revealed that he had been recruited and brought to the UK by a liscenced gangmaster who subsequently placed him in overcrowded and expensive accommodation.
The BRC said: “Our members were key to the creation of the Gangmasters Licensing Authority and work closely with them to expose such practices. They have demonstrated through their own ethical labour audits and support for initiatives such as stronger together that they take a zero tolerance approach to the issue of worker exploitation.”
BRC members include Tesco, Asda and Sainsbury’s and Morrisons.
On the suggestion that the price-war between major supermarkets forces suppliers to squeeze their own margins the BRC said that “it is far too simplistic to suggest that promotions are paid for from supplier margins.”
The BRC said supermarkets can invest in cutting prices by revaluating their operating models or through investing from their own profits.
Featured in the documentary was Norman Pickavance, the former head of human resources for Morrisons. He claimed that the minimum wage “was put in place as a safety net” but it has now become a standard within the industry.
“Too many employers are seeing that as the level, in fact it's the national wage, not the national minimum wage,” Pickavance said.
The BRC said: “the retail industry in general pays above the minimum wage but we cannot insist that our suppliers do likewise.”
The pressure being put on major supermarkets by retailers like Aldi and Lidl has resulted in major supermarkets taking extreme measure to lower prices. This year, Morrison’s vowed to “invest more than £1bn in price cuts over the next three years” while Sainsbury’s announced a joint venture Dansk Supermarket to open 15 discount Netto stores in the UK.