Living Wage and Income Working Group for the German retail sector

Farmers in global supply chains are to be enabled to earn living wages and incomes. This is the goal the Living Wage and Income Working Group for the German retail sector was formed to achieve. At the 2020 International Green Week, representatives of the German retail sector signed a joint voluntary commitment undertaking to actively work towards developing and implementing responsible business practices in their global supply chains.

 

Federal Development Minister Gerd Müller described the alliance as a milestone on the way to fairer global supply chains. After the signing at the 2020 International Green Week, he congratulated the participating corporations ALDI Nord, ALDI SÜD, REWE Group, Lidl, Kaufland, dm-drogerie markt and tegut:

 

„Seven major German retailers have committed themselves to ensuring a living income along their supply chains. It’s good to see movement in food retail. A short while ago, no one would have thought this was possible, and it also shows that consumer pressure is effective.”"

 

In forming this alliance the German retailers hope to use their significant leverage to exert a positive influence on producing and processing companies within their supply chains, thereby helping smallholders and workers around the world to achieve an appropriate standard of living from farming agricultural raw materials such as coffee, cocoa, cotton or bananas.

 

The working group has defined a scope of action for its work:

In early 2021, one year after signing its joint declaration, the group presented a progress report detailing its activities to date and some initial successes.

 

First pilot project: Living incomes in the banana sector

In order to work towards its goal of fair remuneration along global agricultural supply chains, the working group is currently setting up its first joint pilot project in Ecuador, which will focus on bananas. The project aims to ensure fair working conditions and a living wage for banana production workers in Ecuador. In the coming years, the group intends to expand the project to further exporting countries.

Four strategic goals of the working group for its joint banana project in Ecuador

The first stage of the project will focus on fair procurement practices in retail in order to improve wages and working conditions in the banana sector and lay the foundations for implementing living incomes and wages. All stakeholders along the supply chain are to be involved in this process. At the same time the project will develop and utilise monitoring mechanisms to establish transparency regarding wages and working conditions along the supply chain.
In the further course of the project, the group moreover intends to strengthen workers’ representations locally in order to create appropriate framework conditions for the long-term achievement of living incomes and wages.

 

In a few years, the project is to be expanded to cover a second raw material alongside bananas. The experiences and lessons learned from the project on bananas will be crucial to these plans.