United for living wages

In 2022, the working group of German retailers, coordinated by the INA, achieved first milestones on the way to living wages in the banana sector. A first summary can be found here, more detailed information and updates on the individual activities and learning experiences will follow on the INA website: 

Instead of focusing on individual solutions, the WG focuses on pre-competitive cooperation on a common approach. In this way, systemic and broadly effective changes can be achieved and the situation for producers can be improved.  

The WG members ALDI Nord, ALDI South Group, Kaufland, REWE Group and dm-drogerie markt continue to pursue this joint and holistic approach, as this is the most effective and sustainable way to anchor living wages in the sector. This approach includes, among other things, close involvement and support of suppliers and producers in all implementation steps. In addition, the focus is not only on the purchasing practices of retailers, but also on strengthening workers' representatives and piloting measures to improve not only the wage level but also the overall working and living conditions of workers.

During the implementation of the project, it has been noticeable that all stakeholders are in a learning process together, as the practical and scalable implementation of living wages poses challenges that can only be solved in a mutual exchange with all partners. For example, legal guidance is needed for producers on Living Wage Differential payment options to workers. Retailers have committed to pay a cost premium, a so-called Living Wage Differential, for plantations that still have a gap to the living wage, proportionate to their sourcing volumes. This reduces the wage gaps. The unified approach also reduces complexity, effort and costs for producers, who do not receive different requirements from the supply chains or duplications in verification activities.

These first experiences in implementing the project have shown: Achieving living wages cannot be a race, as this tends to put pressure on producers and other supply chain partners instead of supporting a participatory learning process with all stakeholders.  

The Federal Ministry for Economic Cooperation and Development (BMZ) supports the initiative and considers it to be groundbreaking. The BMZ welcomes the fact that ALDI Nord, ALDI South Group, dm-drogerie markt, Kaufland and REWE Group continue to work together for sustainable solutions at origin. Such close cooperation demands a high degree of trust from all parties involved - especially in the highly competitive structure of the German retail sector. The BMZ shows great confidence that the approach of pre-competitive cooperation will also prove its worth in the future. This is because, in the long term, effective and scalable solutions are being developed that will not only achieve changes in the banana sector but will also be transferred to other commodity supply chains. A second project of the working group is being planned.

If you have any questions, please contact:  

Nina Kuppetz  
nina.kuppetz@giz.de