Super Retail Group, a major Australian retailer managing brands like Macpac, Rebel, BCF, and Supercheap Auto, has reported child labor and modern slavery issues in two second-party factories in China, according to its 2024 Sustainability Report. This development underscores critical compliance risks for overseas jewelry buyers sourcing from China, particularly in factories producing private-label and branded jewelry, findings, and packaging. The report highlights the need for rigorous audits and transparent supply-chain management to avoid reputational and legal exposure.
Supply-chain impact
Super Retail Group operates 535 active factories across 16 countries, with a significant portion likely involved in jewelry and accessory production for its private-label brands. The discovery of a 15-year-old child worker—below China's legal working age of 16—at one factory, along with three workers aged 16-18, signals potential labor law violations that could disrupt supply continuity. For jewelry importers and distributors, this case emphasizes the importance of verifying factory compliance with local labor laws and international sourcing codes to prevent shipment delays or contract terminations.
Compliance and logistics signals
The second factory in China was dropped due to critical non-conformances in payroll, attendance, and health and safety, and the factory's refusal to cooperate. Super Retail also terminated a trade partner and its factories over recruitment fee issues. These actions demonstrate that non-compliant factories can be swiftly removed from supply chains, potentially causing sourcing gaps for buyers relying on such facilities. Jewelry companies should monitor their own factory audits for similar red flags, especially regarding migrant worker fees and documentation practices.
What buyers should watch
Super Retail identified gaps in onboarding processes, with seven factories under one trade partner not properly vetted, and two placed on probation. Additionally, orders were placed with two un-onboarded factories, indicating process weaknesses that could affect product quality and delivery timelines. For jewelry buyers, this highlights the need to ensure all supplier factories are fully onboarded and audited before production begins. The use of LRQA EiQ supply chain intelligence platform by Super Retail suggests that advanced risk segmentation tools can help identify high-risk products and factories, a practice worth adopting for sourcing teams.
China sourcing context
China remains a key manufacturing hub for jewelry, including sterling silver, gold-plated brass, and gemstone pieces, but labor compliance issues persist. Super Retail's report shows that even large retailers face challenges with second-party factories, where direct control is limited. Jewelry importers should conduct independent audits, especially for factories producing bridal collections or high-volume sets, and ensure corrective action plans are enforced. The group's commitment to external verification in FY25 signals a trend toward stricter oversight, which may increase costs but reduce long-term risk for buyers.
Source: Read the original report | Published: September 12, 2024