Lidl GB is taking a pioneering step towards closing the living wage gap in its banana supply chain as it gears up to launch an innovative tool and new processes designed to address wage disparities among plantation workers.
Following a successful trial in Lidl Germany, the mechanism is due to be rolled out in September across Lidl GB’s entire banana supply chain. This first-of-its-kind mechanism, developed in collaboration with IDH, a not-for-profit organisation advocating for sustainable trade, calculates the premium which is to be paid by Lidl to close its proportion of the living wage gap for individual workers and plantations.
This tool enables suppliers to develop an action plan to close these wage gaps, with regular analysis and annual adjustments. Initially, wage gaps between local living wages and actual wages paid to workers are identified by collecting and auditing supply chain data. 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 is on track to meet ahead of the national 2027 target.
The discounter’s ambitious timeline demonstrates its dedication to driving change and setting new standards across the sector. Lidl is sharing learnings with producers and suppliers, whilst also providing other supermarkets with access to the tool so they can adopt similar practices to standardise the mechanism, encouraging sector-wide change.
Richard Bourns, chief commercial officer at Lidl GB, commented: “We recognise the importance of addressing wage disparities within our supply chain. 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.”
The tool has already demonstrated success in trials, as evidenced by the Banana Living Wage Project in Germany, where Lidl stores now exclusively offer bananas that ensure the discounter’s premium has been paid so its proportion of the living wage gap is closed.
