Sainsbury's: Proactive Steps to Support Living Wages for Banana Workers
Sainsbury’s is the world’s largest retailer of Fairtrade bananas*. Since 2000, Fairtrade producers have earned an estimated £75 million through sales of Fairtrade bananas at Sainsbury’s, which producing communities can use to improve their social, economic and environmental conditions. This investment has laid the foundations for Sainsbury’s and Fairtrade to focus on wages and climate resilience for the long-term sustainability of banana production for future generations.
In 2023, Sainsbury’s – alongside eight other UK retailers brought together by IDH - committed to enabling workers employed on large banana plantations to receive a living wage by 2027.
In 2024 - three years ahead of the industry deadline - Sainsbury’s took action and decided to ensure a fairer distribution of value to its workers in Cameroon, Colombia, Dominican Republic and Ghana.
The importance of living wages
A living wage ensures that workers earn enough to meet their basic needs and support their families. Living Wages play an important role in poverty alleviation, increased productivity and reduced employee turnover. However, challenges in the banana industry, such as informal work arrangements, lack of unionisation and inadequate occupational safety, present a challenge to making living wages a reality.
Through our Roadmap on Living Wages and tools such as the Salary Matrix, IDH helps supply chain partners in the banana sector identify wage gaps, collaborate on solutions and share responsibility for enabling living wages.
Sainsbury’s - supporting banana workers and the environment
For each box of bananas purchased, Sainsbury's pays a price that covers both the cost of the fruit and an investment in workers’ bonuses to support living wages.
The Fairtrade Premium Sainsbury’s pay also contributes to environmental initiatives, enabling the banana workers to adopt more sustainable farm practices such as carbon capture, reduced water usage, improved biodiversity and enhanced soil health.
Collaboration and strategy
Working with long-term supplier Fyffes, Sainsbury’s first set about calculating the living wage gap, using IDH’s Salary Matrix.
Sainsbury’s also collaborated with long-term partner Fairtrade to develop bespoke Fairtrade Living Wage Reference Prices - the price needed to enable living wages – based on the volume of bananas sold. This means that Sainsbury’s will pay a differential to reduce whatever gap remains after disbursement of Fairtrade Premium. Fairtrade will then work with actors across the supply chain to support the distribution of the Living Wage Differential to workers as a bonus through Fairtrade Premium Committees.
The producer perspective
For producers, paying workers more will bring the welcome benefit of reducing worker turnover and absenteeism. In addition, through Sainsbury’s longer-term commitments, producers can support workers with greater stability and financial security.
We are glad that thanks to the Fairtrade Premium we are able to improve our living conditions and wages. To me, living wages mean more security, better housing and giving an education to my children.
When Fairtrade and companies as Sainsbury's work together and commit to supporting workers in earning decent wages, our families and communities have a better chance to establish decent living conditions.
The support for development of better growing practices is especially important as I feel the effects of climate change and impact this has on the production of bananas.
Call to Action
Sainsbury’s is calling upon other UK retailers to join them in taking action on the industry-wide living wage commitment. Living wage gaps can only be closed if buyers take collective responsibility, ensuring fair wages for every banana worker in the supply chain. Sainsbury’s, in partnership with Fairtrade, wants to collaborate with others to implement measures that strengthen social dialogue and enable sustainable progress towards living wages and decent work.
For retailers to scale their living wage commitments in bananas and beyond, it is essential that social certification schemes address the issue of living wages. That’s why IDH welcomes the solution Fairtrade has developed—it provides a structured and practical approach to support suppliers and producers on their journey towards ensuring all workers earn a living wage. We would like to see more schemes take similar steps to assess and guarantee that living wages are being paid across supply chain
Sainsbury’s is calling upon other UK retailers to join them in taking action on the industry-wide living wage commitment. Living wage gaps can only be closed if buyers take collective responsibility, ensuring fair wages for every banana worker in the supply chain. Sainsbury’s, in partnership with Fairtrade, wants to collaborate with others to implement measures that strengthen social dialogue and enable sustainable progress towards living wages and decent work.
*Based on the latest available global data sales from 2023
IDH recommends companies to use the Roadmap on Living Wages (and its tools) to advance on their living wage journeys and its corresponding tools. In the work with the retailers, IDH also collaborates with other parties in the banana sector including producer associations, traders, certification programs, and international organisations working on the topic such as GIZ, ISEAL Banana Link and the World Banana Forum.
To explore how you can take action with your supply chain partners to close living wage gaps, please check the other case examples which provide some insights on actions taken through our own work and the work of other companies.