Company Profile: LIDL
Headquarters: Neckarsulm
Country: Germany
Founded in: 1930
Owned by: Dieter Schwarz
Name of CEO: Dieter Schwarz
Product description: LIDL sells mainly groceries but its range of non-food products has increased over the last few years, including PCs, household items, textiles and garments, stationary and cosmetics. The company has also started to offer communications services (www.LIDL-handyfun.de and www.LIDL-dsl.de) as well as a photo development service (www.LIDLfoto.com) and a flower service (www.LIDL-blumenservice.de). LIDL started its own online travel section and offers flight and hotel packages (www.LIDL-reisen.de). Lidl sells Power Girls, Power Kids, Bärchen. Kids Fashion, True Fashion, Distra, Fashion Creation, Giani Feroti, Lycra.
Producer countries: CCC research has found suppliers of Lidl in Bangladesh, India, China and Turkey.
General remark: n.a.´
LIDL Dienstleistung GmbH & Co. KG
Rötelstraße 53
74166 Neckarsulm
kontakt@lidl.de
Comments from CCC and proposals for action
In January 2008 the CCC-Germany released a fact-finding report on workers rights violations at Lidl supplier factories in Bangladesh. Lidl immediately asked the CCC for a meeting to discuss the issues raised in the report. The company did not deny that workers rights' violations at their factory happen and introduced the new CSR-strategy of Lidl. However, Lidl is one of the most aggressive price dumper on the market in Germany and other European countries. The price policy of LIDL puts tremendous pressure on suppliers to reduce production costs. This pressure will eventually be passed on to suppliers and workers.
The CCC calls upon LIDL to make sure that its buying practices, including lead times and prices, allow suppliers to comply with labour standards.
The following evaluation of the company’s performance in terms of transparency, code implementation and monitoring of labour standards is based on a research by the CCC – Germany in 2008.
Transparency
The complex structure of the company frees LIDL from the obligation of publishing figures on profits as well as other financial data and information, which can be used by competitors, labour rights activists and the public. It is therefore difficult to be exact about the company’s growth, and research institutes have to rely on estimates.[1] It is said that the company’s profits are equal to about 3% of turnover.
Formal commitment to labour standards
In 2007, LIDL joined the Business Social Compliance Initiative (BSCI). Members of the BSCI commit themselves to a code of conduct regulating the working conditions in their production chain. The code includes the ILO’s core labour conventions.
Code implementation and purchasing practices
The CCC is critical of the lack of transparency in BSCI procedures for code implementation. Results from social audits are not disclosed and there is no information available on questions concerning prices and lead-times.
LIDL clearly does not implement the code of conduct it has adopted. The German CCC’s study “Wer bezahlt unsere Kleidung bei LIDL und KiK? – Arbeitskraft zum Discountpreis, Schnäppchen für alle?“ (Who pays for our clothes at LIDL and KiK? – Labour on sale, a bargain for everyone?”) documents regular violations of labour rights such as workers working excessive overtime and discrimination.
Monitoring and Verification
The CCC has no record on independent controls with the code through NGOs or local labour unions. CCC research shows that most of the workers in the factories producing for LIDL have never heard of the concept of codes of conduct. When auditors visit the factories, workers have to lie about the conditions they work under. If they tell the truth about their pay, the overtime they work or the unacceptable sanitary conditions at the factories, they risk losing their jobs. There are reported instances of auditors coming unannounced and of the workers that looked too young or, in fact, were too young to be working at a factory, being locked in the bathrooms.[2]
Violations of labour rights and public conflicts
The CCCstudy on working conditions in Bangladesh found that there were serious violations of labour rights taking place: There are no unions or workers’ councils. Garment workers usually have to work two hours of forced overtime per day, sometimes more, often unpaid. Pay checks often are inexistent or lacking transparency. Women get paid less than their male colleagues and are often discriminated against; sometimes the supervisors who usually are men beat women workers. If a worker gets sick, she loses her job and has to pay all medical expenses herself.[3]
Recent developments
n.a.
[1] Furstenborg, Jan (2004): The Schwarz Group (LIDL)http://www.union-network.org/UNIsite/Sectors/Commerce/index_multinationals_LIDL.htm
[2] Kampagne für `Saubere`Kleidung (2008): Wer bezahlt unsere Kleidung bei LIDL und KiK? – Arbeitskraft zum Discountpreis, Schnäppchen für alle?“
[3] ibid. p. 38<//span><//span><//span>