Lidl launches tool to close banana supply chain wage gap

Lidl GB is launching an industry-first tool that will help close the living wage gap for farm workers across its banana supply chains.

The mechanism was developed in partnership with IDH, an NGO advocating for sustainable trade. It calculates the premium which is to be paid by the supermarket to close the proportion of the living wage gap for banana plantation workers.

The tool works by collecting and auditing supply chain data to determine the wage gaps between local living wages and actual salaries paid to workers.

Once data is collected, the tool develops an action plan to close any wage disparities identified, with regular analysis and annual adjustments.

Suppliers can then choose their preferred method of payment to workers, such as increased salaries, bonuses, or vouchers for local services like supermarkets.

Following a successful trial in Lidl Germany, the tool is set to be rolled out in September across the discounter’s entire banana supply chain.

Under the Banana Living Wage Project in Germany, 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.

The retailer is also sharing its findings with producers and suppliers, and providing other supermarkets with access to the tool to encourage them to adopt similar practices, as it is hoping to make the mechanism an industry standard.

“We recognise the importance of addressing wage disparities within our supply chain,” said Lidl GB’s chief commercial officer Richard Bourns.

“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 initiative comes a year after Lidl GB committed to closing the wage gap across its banana supply chain.

The retailer is now on track to meet the goal ahead of the national 2027 target, it said.