Somerfield abandons the Ethical Trading Initiative

Mon, 08 May 2006

Somerfield, UK’s fifth largest supermarket chain has dropped out of the Ethical Trading Initiative (ETI), an alliance of unions and retailers who aim to ensure developing countries who supply the stores receive basic labour standards.

This has led to speculation that the chain’s new owners, financier Robert Tchenquiz and venture capital company Apax Partners, are putting profits first over and above the treatment of workers in poor countries.

The chain has 800 stores across Britain and was bought by the Tchengiz led consortium for £1.1bn.

A statement from the Ethical Trading Initiative said, 'Somerfield informed us that the decision was taken after the company entered private ownership on 21 December, which prompted them to reconsider their short-and medium-term business priorities. We hope Somerfield will remain committed to improving the conditions of the workers around the world who grow, pick, manufacture and pack the products they sell.'

However those behind the initiative say progress is very slow from some retailers in addressing worker abuse in factories overseas. Retailers are coming under pressure to increase margins and sell cheap clothes for example, which causes a ‘race to the bottom’ of labour standards that company bosses may not tackle.

The ETI includes non-Governmental organisations, is due to ask retailers over the next few months what else they propose to do to help workers get fair treatment. Non-compliance will mean expulsion from the organisation. Companies such as Tesco, Marks and Spencer and Asda are all members of ETI.

To counteract any negative publicity, Somerfield are adamant that their departure will not have an effect on their ethical standards. They said, 'Somerfield was a founder member of the ETI. We remain committed to the principles of an ethical trading policy and have incorporated accepted codes of practice across our business.

'We have taken the decision not to renew our membership ... but will continue to invest in our monitoring and audit systems to ensure that we source from suppliers with approved standards of employee welfare. We are currently defining better ways in which we can view and monitor the ethical performance of our suppliers utilising our own IT and supplier audit systems.'

The stores decision to pull out of the ETI comes at a time when branding consultancy, Future Laboratory, published a report commissioned by American Express which concludes that a third of UK shoppers consider themselves to be ‘conscious consumers’, who ‘have faith in themselves to be an agent of change.