A study on ‘Prices and Development in the Global Apparel Industry: Bangladesh in Comparative Perspective’ was presented at BGMEA Conference Room by Dr. Mark Anner, Associate Professor of Pen State University and Jennifer Blair, Associate Professor of University of Colorado, USA, on 25 June, Thursday.

In the presentation, the Professors showed how drastically the prices of apparel declined in the US in last few years and it is the retailers who are taking the major share of the profit. “The retailers can squeeze the prices as the competition among the apparel manufacturing countries is very stiff and as there is smaller number of apparel retailers in the world against a large number of manufacturers,” they opined.

Terming the situation as ‘Monopsony’ they said that the monopsony helps big buyers put pressure on apparel manufacturers to reduce prices.

The prices of men and boys cotton trousers produced by Bangladeshi RMG factories declined by 40.89% in the US market in the last 14 years due to the monopsony, the study revealed.

Moreover, if constantly improved, efficiency on the part of supplier results in constantly reduced prices, then the gains in efficiency will be captured at the top of the supply chain, the Professors argued.

They suggested sharing information among the market players to break up the monopsony adding that it is necessary to establish coordination among weaker actors to address power imbalance in supply chain.

The presentation session was presided over by BGMEA President Md. Atiqul Islam while Senior Vice President of FBCCI and former BGMEA President Safiul Islam Mohiuddin, former 2nd Vice President of BGMEA Md. Siddiqur Rahman, Vice President of BGMEA Md. Shahidullah Azim, Vice President (Finance) of BGMEA Reaz Bin Mahmood, Dr. Ahsan H Mansur, Executive Director of PRI, Dr. Nazneen Ahmed, Senior Research Fellow of BIDS, Dr. Golam Moazzem, Additional Research Director of CPD, and journalists from print and electronic media were also present at the session.

“The US government has a role to play. It can help increase the prices of Bangladeshi RMG products as the buyers are paying lower prices to the manufacturers and selling the clothing at higher prices to the consumers,” said Dr. Nazneen Ahmed. Since consumers are not getting the benefits of buying products at lower prices and the brands are making hefty profits, the US government should take the matter into account and can introduce slab, she added.