Seventh Generation is an organic cleaning products company based in Burlington, Vermont. The company says it is the nation’s leading brand of non-toxic and environmentally safe household products. This month, the company’s President, Jeffrey Hollender, explained his decision not to use Wal-Mart to distribute his products. Here is Hollander’s statement: “For most companies, this is a decision that takes about 10 seconds. Given the opportunity, most companies wouldn’t hesitate to partner with a retailer like Wal-Mart. But we’re not most companies. For us, there were serious questions embedded in that decision, questions that most businesses don’t even think about asking. If values extend upstream to our supply chain, we thought, shouldn’t they extend downstream to our distribution channels, too? If we care about the business practices and values of our manufacturers, shouldn’t we apply the same criteria to our distributors? The answer has to be yes. We might sell a lot more products in giant mass market outlets, but we’re not living up to our own values and really helping the world get to a better place if we sell our soul to do it. When we looked at the big picture, it was clear that we needed to find a mass merchant that would not only be a good business partner, but had a reasonable amount of alignment with our own principles. If you read the papers or watch the news, you know that this wasn’t going to be easy, and indeed, when we looked at mass merchant options like Wal-Mart and Costco, we saw very significant differences in every thing from labor practices to general transparency. Wal-Mart, for instance, has virtually no transparency around their supply chain, particularly in their private label merchandise. The company doesn’t disclose its factory locations so that consumers can see how its products are made. In addition, much of the research we’ve seen shows that there are, in effect, huge government subsidies (to the tune of about $1.5 billion annually) going to finance health care and provide food stamps and housing for Wal-Mart employees who can’t afford even basic necessities on their salaries. To me, this is a terrible business model — a company that is generating over 10 billion dollars in annual profits is essentially using public funds to subsidize its labor costs! We wind up subsidizing Wal-Mart with our tax dollars for the benefit of their shareholders. That’s unconscionable. There were other concerns as well from the impact Wal-Mart stores have on local communities to illegal overtime to its discrimination against women. (Visit www.WalmartWatch.com for more details on these and other issues.) In fact, there were so many complex issues to think about that we quickly realized we couldn’t make an accurate assessment, yet alone a good decision about possible mass merchant partners without some significant help. So we turned to the socially responsible investment community to help us figure out who among the giants we should or could work with.” Seventh Generation eventually decided to use Target as a distributor, and not Wal-Mart.
Frankly, producers like Seventh Generation face a Hobson’s choice. They have to choose among the lesser of evils. Picking Target over Wal-Mart is a lose-lose situation. Both companies are built on the same model of exploitation, Wal-Mart being bigger and better known. Target has no union, it pushes its way into communities often at inappropriate locations, its stores are as big and sprawling as anyone’s, and it uses many of the same Third World sweat shops to source its goods as Wal-Mart. To call Target a socially responsible actor is to make a serious misjudgment. The real ethical choice would have been to stay avoid big boxes altogether, but that’s where the large sales volume is. For more information on Seventh Generation, go to http://www.seventhgeneration.com/
