Retailer plans to use living wage calculator developed with IDH to ensure it pays its share of ‘living wage’ for plantation workers
The UK arm of German discounter Lidl says it will close any living wage gap in its UK banana supply chains with the launch of a new system to address pay disparities for plantation workers, following an apparently successful trial in its home market.
The mechanism was developed in collaboration with sustainability enterprise IDH, and consists of an analytical tool and new associated processes. These are due to be rolled out in September across Lidl GB’s entire banana supply chain.
According to Lidl, the system allows it to calculate the price increase needed to close its share of any living wage gap for individual workers and then create an action plan to address any disparity.
“Initially, wage gaps between local living wages and actual wages paid to workers are identified by collecting and auditing supply chain data,” the retailer explained.
“Suppliers are trained on the tool and once supply chain data has been validated, can choose their preferred method of payment to workers, such as increased salaries, bonuses, or vouchers for local services like supermarkets.”
The initiative comes a year after Lidl GB committed to closing the wage gap across its banana supply chain, something the retailer says it is on track to meet ahead of its 2027 target for the UK.
The discounter said this “ambitious timeline” demonstrated its dedication to driving change and setting new standards across the entire sector, not just its own business.
Lidl is understood to have shared its findings with other supermarket chains, producers and suppliers, allowing them access to the tool so they can adopt similar practices and standardise the mechanism.
“We recognise the importance of addressing wage disparities within our supply chain,” said Richard Bourns, chief commercial officer at Lidl GB.
“Through the introduction of this innovative tool, we are not only fulfilling our obligations as a responsible retailer but also setting new and ambitious standards across the industry.
“It sets a precedent for ethical sourcing, but most importantly, helps ensure fair wages for workers on banana plantations.”
Lidl added that its stores in Germany now only sell bananas that ensure the discounter’s premium has been paid, so its proportion of the living wage gap is closed.
