The purchasing practices of brands and retailers have an impact not only on the financial stability and economic sustainability of business partners, but also enable suppliers to pay their workers adequate wages while ensuring adequate working conditions. The adoption of responsible purchasing practices is therefore critical to safeguarding fair working conditions. Benetton Group intends to act as a fair buyer vis-à-vis its suppliers. This is a cross-cutting commitment that requires the support of the CEO and all corporate functions involved, from design to planning, from sourcing to quality control, and last but not least, sustainability. Through the partnership with the Better Buying Institute (BBI), established in 2023, finished product suppliers were involved in assessing the Company’s purchasing practices. The feedback received allowed Benetton Group to identify its strengths and weaknesses and work on the identified gaps. The adoption of responsible purchasing practices requires an approach geared toward continuous improvement.

In this perspective, Benetton Group is committed to minimize the changes to purchase orders after their official emission (adjustments involve less than 5% of orders).

We also undertake to honor the terms of payments and the other contractual terms agreed: our suppliers are usually paid after 90 or 120 days by credit letter or wire transfer.

See our Purchase Order Standard Format

For its industrialized channel (which represents 40% of total production) Benetton Group has full visibility of the costs of its supply chain and takes them into account in the contract, adopting an "open-costing" negotiation approach. Specifically, for the geographies of Tunisia, Serbia and Croatia, an inflation index is constructed annually which considers three components:

  • Labor costs - LCC (adjustments to the minimum wage, social security and insurance contributions, changes in the national contracts of reference); given the attention to the issue, Benetton Group periodically meets with the social partners, trade unions, workers' representatives and national authorities. The cost of labor (direct and indirect) is related to the total production minutes for the various processing phases to identify the labor minute value – LMV.
  • Cost of energy; in the face of the recent energy crisis, Benetton Group actively supports its suppliers in identifying the most protective providers and contractual solutions.
  • Cost of raw materials.

In defining costs, each component is isolated and analysed separately; at the same time, Benetton Group and its suppliers confront each other on the opportunities for efficiency (e.g. optimal use of raw materials).

The development of each new collection is preceded by a discussion between the Merchandising, Finance and Operations teams to consider the index thus constructed in defining prices and to guarantee fair and correct negotiation with suppliers.

The adoption of responsible purchasing practices, as well as the achievement of the other social and environmental objectives of the company, are periodically reported to the Sustainability Committee and to the Control, Risk and Sustainability Committee. During the year, intermediate targets, and activities functional to the management of social and environmental impacts are defined: the departments involved are assessed on these objectives and incentivised to achieve them.

Thanks to the data collected through social compliance monitoring activities, we find that approximately 99,95% of workers in our supply chain are paid with a salary equal to or higher than the minimum established by local law or by the collective agreement and in accordance with the related salary classification grid. Furthermore, approximately 64% of workers in our supply chain receive remuneration in digital form, around 20% are paid in cash, while for the remaining 16% there is a remuneration partly traditional and partly digital.