Faisal Samad knows why global fashion brands keep coming back to Bangladesh.
As director of the Bangladesh Garment Manufacturers & Exporters Association, he sees the appeal up close: its massive scale, a growing network of LEED-certified “green” factories and a reputation as a relatively safe bet after rigorous safety reforms in the wake of the Rana Plaza collapse.
But the real draw, Samad said, is even simpler. Bangladesh is cheap—and that, he argues, has long come at suppliers’ expense.
“Despite Bangladesh evolving over the past 40 years, the buyers’ approach is still all about margins,” he said. “And I think that narrative needs to change.”
Samad, managing director of Surma Garments, a knitwear manufacturer outside Dhaka, wasn’t surprised by a new report from Public Eye, a Swiss watchdog group, and the Clean Clothes Campaign, a coalition of trade unions and civil society groups.
Using long-term global trade data alongside company-specific figures from retail giants such as Bestseller, Uniqlo buyer Fast Retailing, H&M Group, Primark and Zara owner Inditex, the two organizations found that while nominal prices have edged up in Bangladesh, brands are paying 30 percent less in real terms for a cotton T-shirt than they did 25 years ago—even after adjusting for European inflation.
It’s a figure that’s hard to ignore: More than 61 percent of cotton T-shirts imported into the EU are made in Bangladesh for roughly $2 to $3 apiece, though some sell for less than $1.
In 2025, the average EU import price stood at only $16 per kilogram, while sourcing prices from Bangladesh, the main supplier to the bloc, were roughly $13 per kilogram. Since a simple T-shirt on the high street can cost between $12 and $20, a single T-shirt sold at retail can bring in enough revenue for a major brand to buy nearly a kilogram of them at factory-floor prices.
David Hachfeld, a researcher at Public Eye and one of the report’s co-authors, said that this “sustained erosion” of sourcing value hurts supplier stability, lowers wages and casts serious doubt on the industry’s ethical and sustainability promises.
“A transition towards a just and sustainable fashion system based on $2 shirts and other dirt-cheap clothing is impossible,” he said. “Just imagine how much work and material is involved, how fast the production must be and how squeezed prices are.”
He said brands often set a retail price first and work backward from there, pushing suppliers to meet a sourcing cost that has little to do with what it actually costs to make the product.
Mostafiz Uddin, managing director of Denim Expert, a jean manufacturer in Chittagong, knows this pattern all too well.
“What is particularly concerning is that even when input costs rise—whether due to raw materials or significant wage adjustments in producing countries like Bangladesh—these increases are not sustainably reflected in export prices,” he said. “At the factory level, suppliers continue to operate in an intensely competitive environment shaped by constant benchmarking against the lowest-cost sourcing options globally. In such a system, the negotiation power of suppliers remains heavily skewed.”
For Md. Rafiqul Islam Rana, an assistant professor of retailing at the University of South Carolina who studies the gap between brand commitments and factory floor realities, the report indicates a deeper problem in apparel sourcing.
Brands, he said, cannot continue to demand higher wages, improved safety, stronger compliance and better environmental performance from suppliers while holding prices down.
“When sourcing prices do not rise with inflation, wage increases and production costs, the pressure moves down the supply chain,” Rana said. “Suppliers are then pushed to protect thin margins, and workers often feel the impact through low wages, excessive overtime, unstable jobs and limited bargaining power.”
He added that while the industry has made progress in visible areas such as fire safety and child labor prevention, wages, worker voice and job security remain harder to improve because they challenge the low-cost business model itself.
“My main point is that sustainability will remain incomplete unless brands connect their ethical commitments to fairer purchasing practices,” Rana said.
The findings of this report reflect a reality Bangladesh’s garment workers have been living with for decades, said Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity, a workers’ rights group.
“The global fashion industry built its business model on relentless pricing pressure, and workers are paying the human cost of that model every day,” she said. “When brands push suppliers to accept lower prices despite inflation, rising food and housing costs, energy crises and increasing compliance demands, the impact falls on workers through poverty wages, excessive production targets, long working hours, job insecurity and growing mental and physical stress.”
What was already a longstanding problem is getting worse as the race for ultra-cheap fashion and faster delivery is intensifying pressure throughout the supply chain, she said.
“Workers, particularly women who make up the majority of the garment workforce, are expected to absorb these pressures while still struggling to afford basic living costs,” Akter said. “If brands are serious about human rights and sustainability, they must stop treating labor as the most disposable cost in the supply chain and start paying prices that make living wages, safe workplaces and dignity for workers possible.”
When promises meet reality
Several of the brands named in the report pushed back. Bestseller argued that the report missed “some important perspectives and contextual factors,” while H&M Group stated it did not “fully recognize the picture” of its sourcing practices in Bangladesh. Similarly, Inditex claimed the information was incomplete and failed to reflect “the reality of our sourcing from the market.”
Primark acknowledged the role of responsible purchasing practices in supporting fair wage payments, while noting that it works with suppliers that often make products for multiple brands, and Fast Retailing said its sourcing prices take into account product specifications, wages, raw-material costs, transportation methods and tariffs in close discussion with its production partners.
Still, none of the brands offered sourcing price data to rebut the report’s central argument.
“If you ask them, everything is fine, and they take due care of everything,” Hachfeld said. “But there is a clear mismatch. If all companies take due care, why are so many suppliers complaining?”
It’s a disconnect that Mark Anner, dean of the School of Management & Labor Relations at Rutgers University, has spent years studying. Despite more than two decades of commitments, he said, buyers continue to pay suppliers prices that fail to cover the costs of decent work. Worse, they systematically leverage their immense market power to pit factories against one another in what he calls a “relentless squeeze on prices.”
This isn’t a new problem, either. A study he conducted in India almost a decade ago at Pennsylvania State University’s Center for Global Workers’ Rights found that the real dollar price paid by American buyers declined by nearly 63 percent between 1994 and 2017. Equally stark: The real dollar price of blouses made of synthetic fabric exported to the EU fell by 32 percent from 2010 to 2017, and the real dollar price paid by U.S. and European buyers for cotton T-shirts dropped by 41 percent from 2006 to 2018. And all while average lead times accelerated.
“Until buyers are required to ensure that their pricing covers the cost of living wages, humane production targets and safe factories, efforts to eradicate poor working conditions in the global garment sector will remain inadequate,” Anner said.
The math has likewise never added up for Muhammad Azizul Islam, director of the Centre for Governance, Accountability and Sustainability at the University of Aberdeen. In a 2023 survey of 1,000 Bangladeshi suppliers, he found that 76 percent said they were selling at the same price in December 2021 as they had been in March 2020. Another 8 percent said they were selling their clothes for less than it cost to make them, even when supplying household names like C&A, H&M Group and Inditex. As a result, nearly one in five said they struggled to pay the daily minimum wage of $2.80.
When buyers don’t share in the cost of production, the impacts filter down, Islam said.
“The only option suppliers have is to exploit workers to reduce the overall cost of the product and remain competitive in the global market,” he said. “Buyers who do not take basic responsibility and accountability to stop exploitation perpetuate this.”
But the problem goes beyond prices, said Katie Hess, head of product at Cascale’s Better Buying division. Instability, too, can be just as damaging for suppliers.
“Supplier feedback frequently points to unpredictability, such as late changes, fluctuating order volumes, compressed timelines and shifting forecasts, as a major source of operational and financial pressure,” she said. “Factories can sometimes manage low margins better than constant volatility.”
Hess said suppliers also report being cross-referenced against lower-cost sourcing options across regions, with little ability to object because they want to protect future orders and keep business flowing. That dynamic matters, she added, because it goes beyond a simple demand for lower prices.
“Responsible purchasing practices only become meaningful when they show up in actual operational behavior like forecasting accuracy, planning visibility, collaborative costing discussions, realistic timelines, responsible exits and ongoing supplier engagement, not just in policies or commitments,” she added.
Some brands referred to their participation in multi-stakeholder initiatives, such as IndustriALL Global Union’s ACT for H&M Group and Primark and the Fair Labor Association for Fast Retailing. But while voluntary initiatives can demonstrate what’s possible when businesses, labor advocates and civil society organizations collaborate, they’re no substitute for broader industry reform and effective regulation, said Tiffany Rogers, FLA’s vice president of R&D and social compliance.
“MSIs are subject to anti-competition laws which restrict voluntary initiatives from raising purchasing prices,” she said. “As long as extremely low-cost garments remain unregulated and widely available without the true social costs being reflected in sourcing decisions, market incentives alone are unlikely to drive systemic change.”
Asif Dowla, professor of economics at St. Mary’s College of Maryland, agreed that the desire for “everyday low prices,” as seen in the explosive rise of platforms like Shein and Temu, are driving the imbalance in the supply chain, but he also noted that consumers have a role to play.
“The pressure to lower prices translates into increased workload for workers and a shift to automation, which is already driving a decline in female workers in Bangladesh,” he said. “In addition to buyers, consumers are the biggest winners from ‘everyday low prices.’ Consumers cannot continue to demand better working conditions and sustainable production while also enjoying low prices for the clothes on their backs.”
Ultimately, Hachfeld said, suppliers in Bangladesh are being “squeezed dry,” as the report’s title puts it. He argued that one solution is to move beyond voluntary bottom-up costing and establish clear “target prices” for standard garments like T-shirts, jeans and hoodies. He pointed to bananas in Ecuador, where export prices are set below a legal floor.
“The target price is not a fixed price, but a level where you can more or less say, ‘OK, it’s possible to produce in a fair way,’” Hachfeld said. “This is an approach we think can be taken on by brands, by MSIs and by due diligence, because low prices are a human rights risk.”
