Thursday 4 November 2010

Cost of `buying cheap` - Do you know what you pay for?

It feels very good when we find a good deal for groceries, or clothing. In Cyprus, especially lately with the number of choices we have for supermarkets, including all the local and international brands and chains, we can easily find real cheap deals which are good quality. This means you can buy more, and enjoy more!

We feel mesmerized, and so much carried away with the offers we are given, as if it’s a theater and we are the leading actor in this huge grocery store. Everything is for us. All we need to do is `buy and enjoy`. However unfortunately most of the time, we don’t think about what we really pay for. Is it really cheap, good quality shirts or chocolate? Or is it the critical working conditions, child labor, and sweatshops these huge discount supermarkets trade with or set up in Global South to produce and offer these cheap offers for us? What do we really pay for?

Increasingly, numerous branches of the service sector industry are being relocated to the Global South, lured by the possibilities of low labor costs, high levels of productivity and new markets. However, in the countries where the low labor costs exist, it is not a criteria for most discount retailers whether the working conditions are fair or not. How long are the working hours? Is there child labour? Are the workers mainly women? Do they have any proper rights and benefits from that job? How is environment treated?

The earth is asking us to be more responsible, considering the illnesses, environmental crises, crises related to poverty, illiteracy, and hunger. This is why we as consumers, need to be conscious and aware in the choices we make. How do we affect the world we live in with the choices we make? For instance, for many years, according to a study done by Alam et al (2008) “ Lidl made no public comment on the issue of Corporate Social Responsibility. Questions from the “Clean Clothing Campaign” as to how the company ensures compliance with international labour standards, remained unanswered. It was not until 2007 that Lidl joined the Business Social Compliance Initiative (BSCI), without making this public.” However, on the other hand according to Muller-Hoff and Saag Maaß( 2006) from European Center for Constitutional and Human Rights,

“The principles of BSCI its members are in fact not obliged to guarantee social standards, whether in their own corporation or at their suppliers. Rather, the objective is merely that they attend, for example, training sessions on personnel management, or work on “social audits”. These audits are carried out by businesses that are being paid by BSCI members such as Lidl. Local NGOs and trade unions are not involved in the examination process, and neither the tests nor the results are published, giving rise to doubts concerning their validity. It is thus difficult to label these audits as independent and external control mechanisms.”

It is possible for European retailers and companies, such as Lidl, to reduce their production costs and risk, and, at the same time, their social obligations through outsourcing. This also helps retailers in giving customers the impression that they fulfill their social responsibilities and produce goods in accordance with internationally recognized standards. For example according to interviews done by Alam et al (2008) with the workers of the factories where Lidl also gets her supply from “there are massive violations against internationally accepted standards”, such as mandatory overtime, discrimination against women, child labour, unhealthy working conditions, polluted drinking water, threat of dismissal, torture, and forcing and threatening to lie about working conditions when there is audit.

The stories behind the cheap products of discount retail stores are food for thought. It is consumers’ right to know and to be aware of what they pay for. Even if it is not our priority to `save the world`, we need to make it our priority `not to destroy it` with the choices we make, so that we and our children can continue enjoying it!