Improve procurement practices

Retailer Coop and Fairtrade Max Havelaar, both based in Switzerland, collaborate to support workers on two banana plantations in the Dominican Republic. Accurate measurement of the wage gap was critical to understanding the extra amount needed per box of bananas to achieve a living wage. Then, distributing the value to workers was made possible through a fund. To ensure their contribution was longer lasting and had producer support, since 2021 Coop committed to minimum purchase volumes. Now that Coop’s bonus contribution and volume commitments have been established for a few years, Coop and the banana plantations continue to discuss the future on how to ensure a long term stability. For more information, see the full case study here.

Uniforms from apparel maker, Schijvens, are found on employees at well-known companies, including McDonalds, Albert Heijn and the drugstore-chain Kruidvat. Schijvens began their living wage journey by making changes at their own factory in Turkey before expanding the effort to include suppliers in other countries, such as Pakistan and China. Schijvens uses transparency to bring its customers on board. They share open cost calculations – showing them exactly how the price they pay relates to wages paid in the factories – with customers to communicate the impact of living wage payments on worker livelihoods. For instance, Schijvens’ found that raising the price of polo shirts by 25 cents per item was sufficient to achieve a living wage.  Most customer companies support the mission, and when prices cannot be raised, Schijvens pays the difference from its own margin. For more information you can visit the full case study here.

Nudie Jeans is committed to make living wages possible for employees at all their main suppliers in high-risk countries by 2025.Nudie Jeans is a small but important buyer with most of their suppliers. Nevertheless, the brand is now paying their share of the living wage to one third of their suppliers’ workforces. Nudie Jeans applies a unique strategy that puts the supplier in the lead and empowers them to define their approach to living wage, manage the living wage payments transparently and build their capacity for social dialogue. Moreover, they encourage their suppliers to engage with additional buyers besides Nudie Jeans to join in and do their part. For more information you can visit the full case study here.

In a joint gap assessment, Dutch retailers found an average wage gap of 9% in the banana supply chain. Together the retailers will reduce this gap by at least 75% within in the next 5 years. That requires a change in procurement practices and a clear commitment to working with suppliers. Read more about the full case study.

At the heart of the new approach is a ‘joint open-book costing approach’, based on the Fairtrade labelling system’s costs of sustainable production methodology, applied to conventional and Fairtrade certified fruit alike. The annual tendering round by potential suppliers, which was widely seen to exacerbate the race to the bottom in banana prices across the EU markets and beyond, is to become a thing of the past. ALDI Nord is also expected to roll out the same renewed buying strategy and practices.

Buyers enter data on the quality and amount of tea they wish to purchase. The model provides insights into the price that needs to be paid to create enough value to potentially narrow the living wage gap by an agreed percentage. All members of the Malawi Tea 2020 program recognized the need for a tool that provides insights into sustainable procurement practices. However, the implementation and design of the model was a cause for debate for both buyers and producers. It was decided that buyers in the Malawi Tea Program would use the sustainable procurement model, but that the passing-down of any value to workers would be negotiated within individual buyer–producer relationships.