International retailer Lidl has set ambitious living wage goals within its supply chain to improve wages for banana workers.
Lidl’s Human Rights Strategy emphasises fair pay as a critical component of addressing risks such as child and forced labour. Tropical fruits, particularly bananas, were identified as high-risk and high-volume products, prompting Lidl to focus its efforts on this sector.
Lidl’s first step was to conduct a human rights impact assessment of its banana supply chain in Colombia. Partnering with local producers, Lidl carried out desk and field research to understand the existing wage landscape. Based on the findings, Lidl made a commitment to close the living wage gap for the proportion of bananas it sourced for the German market. Since then, the project has expanded to additional countries as well.
Implementation
Lidl introduced its suppliers to the project through onboarding and training programs, which focused on explaining the concept of living wages and the methodologies for assessing wage gaps. Each producer was required to complete a Salary Matrix, which was then audited by Flocert to ensure accuracy. Using this data, Lidl calculated the financial contributions necessary to close the wage gaps and set up action plans with suppliers on how to distribute the funds directly to workers.
Lidl identified a lack of existing tools for proportionally calculating and tracking contributions and ensuring they reached workers effectively. To address this, Lidl partnered with IDH to develop a tool to improve tracking accuracy and distribution.
Pilot: scaling across suppliers and regions
Using the calculation tool, Lidl scaled its efforts to over 260 plantations across Colombia, Guatemala, the Dominican Republic and Ecuador. Each supplier developed action plans to close wage gaps, related to Lidl’s purchase volumes. During this phase, a supplier in the Dominican Republic introduced monthly food vouchers for workers – to use in local supermarkets. Many other producers later adopted this method; others opted for in-kind benefits or cash bonuses as alternative additional payments for workers.
Next Steps
Lidl has extended the program to new sourcing countries and markets. While these payments address wage gaps tied to Lidl’s purchasing volumes, they signal strong support for fair wages and more sector–wide solutions. In 2024, Lidl added markets in three countries to its Living Wage Banana Project and further ones are planned.
European Retail Commitments
Lidl’s work aligns with broader European retail efforts, with 21 retailers across Germany, the Netherlands, Belgium, and the UK committed to ensuring living wages in the banana sector. By demonstrating how companies can implement practical, scalable solutions to close wage gaps, Lidl has set a benchmark for sustainability and fairness in the banana supply chain.
IDH recommends companies to use the Roadmap on Living Wages (and its tools) to advance on their living wage journeys and its corresponding tools. In the work with the retailers, IDH also collaborates with other parties in the banana sector including producer associations, traders, certification programs, and international organisations working on the topic such as GIZ, ISEAL Banana Link and the World Banana Forum.
To explore how you can take action with your supply chain partners to close living wage gaps, please check the other case examples which provide some insights on actions taken through our own work and the work of other companies.
Living Wage Action Guide
To explore how you can take action with your supply chain partners to close living wage gaps, please check the Living Wage Action Guide. In this free, online resource you can find more case studies, inspiring examples and practical tips.
