AB Foods share price: Primark ethics under fire

By: Michael Kamberov
Michael Kamberov
Kamberov joined us to improve his ability to report the financial markets and learn about business. He now heads… read more.
on Jun 25, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Wednesday, June 25: Primark, a subsidiary of Associated British Foods (LON: ABF), has launched an investigation after a shopper claimed that her dress contained a label reading “forced to work exhausting hours.”

“You hear all sorts of stories about people working in sweatshops abroad – it made me so guilty that I can never wear this dress again,” Rebecca Gallagher, 25, told The South Wales Evening Post in a report on June 16. The young mother added that the label looked like a “cry for help – to let us people in Britain know what is going on.”
Ms. Gallagher says that following the incident she tried to call Primark but was “put on hold for 15 minutes before being cut off.”

The South Wales Evening post reported today that a second shopper has come forward saying that a Primark top bought in Swansea in 2013 has a label which reads “Degrading sweatshop conditions.”
The Irish clothing retailer is investigating the case. According to Vogue, Primark believes that the label was either added once the dress arrived in the UK, or it was sewn in by a factory worker before it was shipped. Some people have speculated that the incident might be a form of guerilla advertising by campaigners trying to attack big brands.

**Response**
The budget retailer responded to the claims for Vogue on Monday.
“We find it very strange that this has come to light so recently, given that the dress was on sale more than a year ago, with no other incidents of this kind relating to this dress,” a Primark spokesman said.
“We would be grateful if the customer would give us the dress, so we can investigate how the additional label became attached and whether there are issues that need to be looked into.”

“Primark ‘s code of conduct sets out the core principles that suppliers and factories must follow to ensure products are made in good working conditions, and that the people making them are treated decently and paid a fair wage. We inspect each factory to ensure it is meeting the code and support it by providing guidance and training when issues are identified,” the spokesman added.

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**Previous incidents**
In April 2013 an eight story building in Bangladesh, housing factories supplying clothes to Primark and other budget brands, collapsed. More than 1100 people died, and over half of them were employed by a Primark supplier. Earlier this year, Primark announced plans to pay £7 million to victims of the disaster.
In 2008 a BBC Panorama investigation found that children as young as 11 were working in a Primark factory in India. The budget retailer promised to redouble its efforts to end sweatshop labour.
**AB Foods share price**
AB Foods shares are currently trading at 3.017p, 1.21 percent down on the day.
As of June 20, the consensus forecast amongst 30 polled investment analysts covering Associated British Foods plc for the FT advises investors to hold their position in the company.
**As of 10:50 BST buy AB Foods shares at 3018.00p**
**As of 10:50 BST sell AB Foods shares at 3016.00p**

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