A damning report produced by development agency ActionAid has suggested that the low prices enjoyed by British supermarket shoppers are the result of a denial of basic human rights in some of the world’s poorest countries, along with poor wages and job insecurity.

The report claims that the growing power of large-scale retailers is the driving force behind exploitation of vulnerable overseas workers, especially women, and that the supermarkets, who take £7 of every £10 spent on the high street, are using their financial clout to drive down prices for overseas suppliers whilst presenting themselves as socially responsible bodies.

ActionAid, which works in more than 40 countries, has called upon the government to set up an independent regulator and calls for supermarkets to take concrete steps to address the impact their buying practices are having on poverty-stricken overseas workers.

“Labour rights abuses in supermarket supply chains remain systematic, and in fact they are becoming more severe. It is becoming painfully clear that a decade of voluntary attempts to curb the negative impacts of these practices has failed, and binding legislation must be introduced,” the charity reported.

Bananas was one product to come under the spotlight, when an investigation into growing in Costa Rica found that workers’ rights, pay and conditions have suffered from the intense price war which rages between UK grocers. Suppliers are forced to absorb extra costs, as supermarkets typically take between 70 and 90 per cent of a banana supplier’s stocks.

But wages have dropped to just 33p an hour, and job insecurity has increased. Women have been forced out of permanent work into casual labour. ActionAid welcomes recent moves by UK retailers to switch supplies purely to Fairtrade, but said there was a danger that “corporate goodwill to respect people’s rights can be reneged on when market conditions get tough”.

ActionAid broke down the share of UK supermarkets’ retail price for bananas, estimating that 45 per cent goes to the retailer, 18 per cent to the UK importer/ripener, 19 per cent to transport, 15.5 per cent to the plantation company and just 2.5 per cent to the workers on the ground.

Sainsbury’s said it was working hard to address the issues related to the Costa Rican banana industry, especially since July 2007 all farmers sending bananas to the chain would receive a Fairtrade return. “This ground-breaking move has led the industry, with others now following suit,” said the retailer.

Tesco has also defended relationships with suppliers, claiming that although conditions in developing countries can be hard, both Tesco and its suppliers “believe trade is the best route out of poverty”.

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