Tchibo calls for textile industry regulation

In few sectors of the economy are price pressures as intense as they are in the textile industry. Many of us can afford the luxury of following fashion trends and buying new clothes several times a year. We in the more affluent parts of the world have become used to paying only a few dollars or euros for a new shirt.

It's a mere logistical problem for retailers to offer new collections at regular intervals to satisfy the wishes of shoppers. And if customers feel the pants they want should not cost more than €40 ($45), then so be it. The wages of workers producing them will be adjusted accordingly.

But wait a minute! Some retailers have meanwhile understood that you can't keep doing this endlessly. They want to have their products produced in a more sustainable way and would love to see workers (most of them female) being able to  live decent lives with the help of the wages they receive.

The state to the rescue?

German consumer goods chain Tchibo is one of those companies willing to make a change.

According to the firm, it has been pursuing the strategic goal of a fully sustainable production chain for 13 years. But the company's Nanda Bergstein, who deals with issues of corporate responsibility, told German news agency DPA that "voluntary initiatives are no longer sufficient" to reach that goal.

"If we don't pay higher wages now, 'fair fashion' will remain an illusion," she said, adding that an initiative called ACT on Living Wage could help push that agenda. The initiative also counts garment chains C&A and H&M among its members.

Bergstein argues all German market players should join ACT, adding that the governments of nations where the textiles are sold should exert pressure on the governments in supplier nations to enforce higher wages and better working conditions.

Point taken, but …

The call for government assistance is not that new at all. In February, the German Development Ministry staged a forum where participants debated ways of shaping globalization in a fairer way. Development Minister Gerd Müller said he was aware of the problem of grave wage injustices and "unbelievably poor working conditions at the beginning of supply chains."

Ahead of the forum, there had been international criticism of the German government's perceived failure to do something about the problem. In the fall of 2018, United Nations experts had chided Berlin for not introducing legislation that would help improve the conditions for workers in supply chains overseas — legislation of the kind already in place in France, the UK and the Netherlands.

Higher wages not enough

But make no mistake. It will not suffice to just ensure that affected workers will get higher wages by putting pressure on the various subcontractors involved in the production process.

Of course, it would be an important first step to ensure those workers can actually live off their wages, but it's equally important to see to it that unified safety standards are introduced and adhered to at the production facilities overseas.

It's an issue of corporate solidarity. Tchibo itself points out how hard it is to get all European garment retailers organized in associations such as ACT. Needless to say, companies in low-wage nations face fierce competition over who can offer production with the lowest labor costs involved — this is more often than not a unique selling point.

Tchibo made another attempt this week to find out how much government support it could expect. No breakthrough was reported. It stands to reason that the company — while eager to push its sustainability agenda — does not want to become a victim of unilateral competitive disadvantages.