UK fashion manufacturing survey reveals experience of unfair purchasing practices

Results from a survey of UK clothing manufacturers, analysed by academics from the University of Leicester, University of Nottingham and independent trade justice charity Transform Trade, have revealed unfair purchasing practices by brands and retailers are commonplace within the industry.

Manufacturers reported brands paying late; making last-minute changes to orders, not paying for the changes, then fining manufacturers for late delivery; and demanding extra price reductions even after production has started.

Professor Nik Hammer from the University of Leicester School of Business said: “These research findings emphasise the need to re-balance relationships between brands and fashion manufacturers in the UK, to support UK manufacturing, sustainable business models, investment strategies and to strengthen work and employment in the sector.” 

One manufacturer said: “We bankrolled their businesses with 60-90 days’ credit, layout costs, and logistics – yet we’re the first to be penalised with discounts or cancellations.”
 
The findings highlight the transfer of inappropriate risk from retailers and brands to manufacturers. These include: 
• 31% of manufacturers reported brands cancelling orders;  
• 78% experienced brands not covering the costs for last-minute changes they made to previously confirmed orders. 
• 75% reported brands not adjusting price to account for increases in minimum wages.  
• 67% experienced brands quoting for large orders, then reducing the size but keeping unit cost the same. 
• 44% reported brands making regular requests for payment extensions; 10% experienced order payments being delayed more than three months past originally agreed terms. 
• 31% reported penalties for being late when the brand caused the delays with order changes after contract. 
• 29% reported brands insisting on discounts after entering into a contract. 

Another manufacturer shared: “Factories are expected to turn around changes to specifications or products even while garments are already on cutting tables.” 

Manufacturers reported the impact of these practices being passed onto workers. Reporting increasing overtime to fulfil sudden increases in orders (73%), reducing employee hours due to cancellations (58%), and workforce terminations (29%) in response to sudden contract changes. 

Findings show the minimal faith respondents had for institutional routes for dispute resolution – with only 22% pointing to the legal system as holding a viable route for redress, 21% court action, and no manufacturers considering government, multilateral or multistakeholder initiatives a viable route. Respondents consistently highlighted financial and legal barriers to disputes, noting that they “haven’t got the money to challenge” and that “any legal comeback is way beyond our means,” indicating that pursuing formal dispute mechanisms is often unaffordable.  

With no viable available avenue for redressal, a Government action is needed to address unacceptable brand behaviour, undertaken by brands benefiting from the UK consumer market. In the UK a Garment Trading Adjudicator (also referred to as Fashion Watchdog) needs to be established, similar to the Groceries Code Adjudicator which curbs the unacceptable purchasing practices of the UK’s largest food retailers. 

Sabina Lawreniuk, from the University of Nottingham, added: “Our research shows that current brand purchasing practices directly impact workers, resulting in precarious and insecure work across UK factories. Voluntary codes have proven insufficient. If we are serious about protecting workers and supporting a sustainable UK fashion industry, we need a Garment Trading Adjudicator to enforce fair practices across the sector.” 
 
Hilary Marsh, Garment Policy Advisor, Transform Trade said: “This report is yet another piece of evidence of the harmful practices that perpetuate across the global industry. Manufacturers in the UK, India, Bangladesh and others across the world are reporting the same experiences. A Fashion Watchdog would enforce fair business practices for the sector.”