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H&M will increase payments to its suppliers

BTJ Desk Report
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H&M will increase payments to its suppliers

Hennes & Mauritz AB (H&M) has committed to offsetting increased workers’ wages in Bangladesh by adjusting the prices it pays clothing suppliers in the country, as outlined in a letter seen by Bloomberg News. Following the Bangladesh government’s approval of a 56% hike in the minimum monthly wage to 12,500 taka ($113) starting December, H&M informed its garment providers that it will “absorb the increase of the wages in our product prices.” The company expressed its support for fair and competitive wages within its supply chain and emphasized its dedication to enhancing working conditions.

The decision by H&M follows weeks of protests by garment workers seeking a higher wage increase than initially proposed by the industry group. The fear among manufacturers was that the mandated salary hike could impact profit margins, given that fashion retailers were maintaining the same prices for orders.

Mostafiz Uddin, Managing Director at Denim Expert Ltd., expressed relief and stated that the move by H&M would help ensure fair wages for workers. He anticipated that other brands might adopt similar measures. A spokesperson for H&M confirmed the communication of changes in purchasing practices to suppliers through a letter.

Bangladesh, the world’s second-largest ready-made garment exporter after China, has attracted the textile industry with low wages. With approximately 4 million employees, the industry contributed a significant portion to the country’s gross domestic product in 2022.

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