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Supermarket dividends surge during COVID-19 pandemic but little help for workers in supply chains – Oxfam

Supermarket dividends surge during COVID-19 pandemic but little help for workers in supply chains

Major supermarkets from the Netherlands, UK and US increased their dividend pay-outs to shareholders by an average of 123 percent – from $10 billion to over $22 billion – during the first eight months of the coronavirus pandemic, according to a report published by Oxfam today.

The report highlights how COVID-19 related costs reported by the supermarkets are significantly less than additional revenues gained and increased shareholder pay-outs. There is also little evidence to show that supermarkets are investing in long-term supply chain improvements to help food producers and workers experiencing extreme hardship due to the pandemic.

The listed supermarkets analysed by Oxfam distributed nearly all their net profits – an average of 98 percent – to their owners and shareholders while spending around $11.3bn in COVID-19-related protection measures. Market capitalization increased by $101bn between March to December 2020 compared to an increase of $75bn in 2019.

Despite decreased profits across UK supermarkets Tesco, Sainsbury’s and Morrisons, all increased their dividend payments while the parent companies of privately owned Aldi and Lidl supermarkets, in the Netherlands and Germany, profited from extra sales over this period, but their lack of financial reporting does not show who benefitted.

Rachel Wilshaw, Oxfam’s Workers’ Rights Senior Manager, said: “While frontline workers in stores and supply chains worked hard to keep our cupboards stocked, in the boardrooms it was business as usual, with bosses putting the interests of shareholders, owners and directors ahead of their workforce.”

The report also found that exploitation and discrimination of workers and farmers in food supply chains remains pervasive and systemic, particularly for women who are concentrated in the lowest-paid, most precarious work, making them particularly vulnerable to crises like COVID-19.

Interviews by Oxfam with workers and farmers found they did not earn a living income or wage, with women continually in the lowest paid, lowest skilled jobs, despite, for instance in Brazil’s coffee production, being better educated than the men. Calculations show that less than one percent of shareholder pay-outs in 2020 could close the gap between current wages and a living wage for workers in Brazil’s largest coffee producing state, Minas Gerais.

Wilshaw said: “Workers in the supermarkets’ global supply chains continue to be faced with poverty, exploitation and discrimination. There needs to be a fundamental shift in the way supermarkets truly tackle human rights, gender inequality and unfair distribution of income for workers and small-scale farmers in their global supply chains. But progress is possible – as we have seen – and supermarkets have it in their power in this critical moment to act.”

Oxfam’s Behind the Barcodes scorecard (published in June 2020), which ranks supermarkets’ policies and practices on human rights in their supply chains, shows that a number of supermarkets – Aldi South, Lidl, Jumbo, Morrisons, Rewe, Sainsbury’s and Tesco – improved their performance with an increase of more than 20 percent since the start of the campaign in 2018. This reflects the additional steps these companies are taking, but the pace of progress remains far too slow. 

Of all the supermarkets only the UK’s Tesco and Germany’s Rewe have published a gender policy to tackle the exploitation of women in supply chains and the actions they will take. Last year, Lidl also made significant new commitments, welcomed by Oxfam, including strengthening its policy on human rights and a promise to tackle wages of workers which fall well short of a living wage.

Oxfam calls on supermarkets to identify supply chains where women are at highest risk and take action; establish policies and structures that promote gender equality; and demonstrate leadership through their own practices and by calling on the sector to tackle these crucial issues.

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