Will price always be the decisive factor?
June 14th 2010 Posted at Ethical business, Fair Trade
16 Comments 
Ethical companies rely on people being willing to pay more to support a progressive idea, be it fair trade, sustainability or a green business. Assuming that most consumers know what these concepts mean, are they willing to pay more to support them, or will price always be the decisive factor?
With the mood of the country being dominated by talk of cuts in public spending and increases in taxes, and job security still very much at the forefront of many people’s minds, companies specialising in cheap are enjoying a boost in popularity.
Primark is the prime example, if you will excuse the pun; the brown paper bag with the letters ‘PRIMARK’ printed across it dominates the cities of the UK at the moment. Primark’s whole appeal is price. They are arguably the cheapest high street clothing brand. They have also been linked to UK sweatshops, with the BBC exposing a supplier to Primark with workers on 12-hour shifts at £3.50 an hour. As Neil Kearney of the International Textile, Garment and Leather Workers’ Federation is quoted as saying in the BBC article, “There’s no such thing as cheap clothing, somebody has to pay and in this case it’s the workers in Manchester”.
The report linking Primark and UK sweatshops came out in January 2009, yet the company has since enjoyed continuous growth throughout the UK. The link between cheap clothing and underpaid producers has been made and is well publicised, yet consumers do not seem to care enough to pay that little bit more and shop elsewhere.
There is simply no way that ethical businesses, such as the By Hand fair trade shop, can compete on price. Supermarkets sell silver earrings for a couple of pound a pair, bags can be bought for as little as a few pounds. Although the cheap prices can sometimes be explained by economies of scale – by the sheer quantity sold by the big players – more often than not the prices are cheap because the producers are forced into selling their goods for far lower prices than they are worth, or because the products are made in factories in countries such as Indonesia and China where workers work 12+ hour shifts, have no rights and are paid a pittance.
There is a reason products are cheap: exploitation. But do consumers care?
On a lighter note, here is a great song by the Berlin-based band Ohrbooten. The key words in the song are “billiger, billiger, billiger” or “cheaper, cheaper, cheaper”.
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