A new report by the Finnish NGO Finnwatch has charged that forced and trafficked labour are partly responsible for the relatively low prices of the in-house brands sold by local food retail giants.
The organization has reviewed the production of goods for the private label products offered by domestic food chains S-Group, Kesko, Suomen Lähikauppa and the German chain Lidl.
Researchers looked at canned tuna and pineapple juice processed in Thailand for its study.
None of the workers in the tuna processing facilities had any written work agreements, many had been forced to pay high broker fees for their jobs, and in some cases they were minors.
Moreover the working conditions in some of the plants met the definition of forced or trafficked labour.
The plants producing pineapple concentrate were found to be violating Thai law and infringing its workers’ human rights.
“The plant employed minors and undocumented immigrants trafficked into the country. The plant did not pay workers the legal minimum wage, implemented forced overtime and did not provide workers with annual vacation. The employer had confiscated the immigrant workers’ passports and work permits to prevent them from changing jobs,” Finnwatch reported.
“Conditions at the plant in many ways met the criteria for forced labour and human trafficking,” Finnwatch explained in its report entitled “Affordable has its price”.
Small not always beautiful in the retail trade
According to Finnwatch large buyers in the food retail market wield disproportionate power in the market. Their purchasing might gives them the ability to negotiate better deals with suppliers than other buyers.
“The purchasing power of the large food chains may provide benefits for consumers, but retailers in positions of power transfer unsustainable risks and costs to the producers,” Finnwatch concluded in its report.
The organisation said that it is difficult to document the buying practices faced by primary producers due to the asymmetrical power relationship with big buyers.
Finnwatch referred to international research which attempted to interview 200 producers in developing countries. Not one of them provided any information to the research group for fear of being blacklisted.
“British competition authorities also ran into this fear producers have of talking about their problems, in a report in 2000 that mentioned the prevailing 'climate of fear',” Finnwatch added.