39% apparel exporters accept prices below production cost for the sake of business relationship, says study

by Apparel Resources News-Desk

08-November-2019  |  1 min read

Bangladesh Garment Industry
Image Courtesy: thepages.com.bd

A recent study by the Amsterdam-based Fair Wear Foundation (FWF) has revealed a startling fact which underlined that as many as 39 per cent of Bangladeshi garment exporters accept prices below their production costs for the sake of business relations with international retailers.

The study (Labour minute costing and price negotiations with buyers) by the independent multi-stakeholder organisation that works with garment brands, garment workers and industry influencers to improve labour conditions in garment factories further maintained that apart from the threat of severed business ties, the suppliers accepted work orders from foreign buyers at rates lower than their production costs for mistakes in cost calculation or to one-up their competitors.

“If the suppliers do not accept prices below their production costs, they will lose everything as they will have to pay the workers at the end of the month without any production in the factories,” observed FWF’s Country Manager for Bangladesh and Myanmar Koen Oosterom presenting the findings of the study in Dhaka recently, adding that the factory management also accepts lower prices in the hope of price hike and profit in the future.

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