Ethical Labor Practices: Tesco’s South African Supply Chain Under Scrutiny

Posted on Jan 15, 2025 in French

This text from *The Guardian*, dated May 15, 2009, discusses accusations against Tesco for allegedly failing to uphold its commitments regarding the wages and working conditions of agricultural workers in South Africa. It also covers the British chain’s response.

Despite the global crisis, Tesco is making record profits. However, in 2006, the chain was accused of neglecting the living conditions of its workforce. At that time, Tesco committed to paying decent wages that would meet the basic needs of its fruit pickers, and even a little more.

However, recent figures indicate that discrimination, particularly against women, persists. This would be in contradiction with the Ethical Trading Initiative (ETI) Charter signed by Tesco. Indeed, women represent a seasonal workforce that is underpaid for picking and packing (they barely have enough to feed their families). On the other hand, men more easily obtain one of the 104,000 permanent jobs available on the 3,000 farms in the country, of which only 790 are Tesco suppliers.

In its defense, the distributor boasts of being ahead of its competitors in monitoring its subcontractors, which it has audited by an independent body. Tesco claims to comply with ETI standards, as well as South African laws, while refraining from interfering with the amount of a salary perceived as “correct” in this country.

Who to believe: Tesco or its detractors? It seems that progress has been made but that the plight of agricultural workers in South Africa is far from satisfactory.

Strategies for Staying Competitive in the Global Market

  • Corporate and public strategies vary widely, not only to “stay competitive” but also for companies to gain new market share.
  • The Government plays an active role in supporting some sectors of the economy, particularly in times of crisis (for example: subsidies to the car industry in various countries, bailout plans in the banking sector, and corporate or income tax cuts to encourage investment or hiring).
  • Measures to boost exports (with stimulus packages) and limit imports (non-tariff barriers) are also possible, even if protectionism goes against the grain of free trade.
  • Heads of State don’t hesitate to use their influence or prestige to secure large-scale deals abroad in sectors such as energy or transport.
  • Public investment in education, research, and development is also a way to prepare for the future and to ensure that innovations will follow suit.
  • By occasionally creating new needs, companies have been using advertising as a tool to influence consumers and boost their sales for decades.
  • Economies of scale also enable firms to cut costs and offer their products at a better price.
  • It has long been popular practice for companies to outsource their production to countries where labor is simultaneously cheap, obedient, and efficient.
  • Diversification and reactivity to the market’s expectations and demands are other possible means of securing turnover growth.

Business Letter: Casual Wear Ltd. Inquires About Special Offers

Casual Wear Ltd.
1-6 Clay Street
Cape Town
South Africa
May 10th, 2010

On the Run
W 33rd Street
New York, NY 10001
USA

For the attention of Mr. Glory, Sales Manager

Dear Mr. Glory,

Thank you for your latest catalog and price list. We were also pleased to find enclosed your special offers as well as samples of T-shirts and tracksuits.

We find these products particularly attractive; they should sell well at the moment in South Africa with the upcoming 2010 World Cup.

We feel certain that these items will perfectly meet our customers’ expectations, especially at this time.

May we remind you that we have been supplying large chains of department stores all over the world with these products for a number of years.

Therefore, we would appreciate it if you could grant us a more substantial rebate of 7% rather than the 3% featured on your offer. This would enable us to place a more significant order considering the importance of the global sporting event to be hosted by South Africa.

We look forward to doing business with you in the near future.