Tesco suspends Chinese card maker on forced-labor allegation

U.K. grocery giant Tesco Plc suspended its supply of Christmas cards from a Chinese factory and said it was investigating a newspaper report that prison labor was used in their production.

All the cards produced by the factory have been withdrawn from sale, Tesco said in a statement on Sunday. If the investigation shows a breach of the company’s rule against using prison labor, then the factory will be removed from Tesco’s supplier list “immediately and permanently.”

The Sunday Times reported earlier that a 6-year-old girl from London, Florence Widdicombe, discovered a note in her Tesco Christmas cards that read: “We are foreign prisoners in Shanghai Qingpu Prison China. Forced to work against our will. Please help us and notify human rights organization.”

Such notes have been discovered in products sold by brands like Walmart Inc. and Saks Inc. in the past decade as western companies’ reliance on Chinese production has meant exposure to chains of sub-contractors that reportedly make use of prison labor.

While paying inmates to work is not prohibited under International Labor Organization guidelines, most international companies say they avoid prison labor because it is often difficult to ascertain whether prisoners were forced to work.

Tesco said that its Chinese supplier, Zhejiang Yunguang Printing Co., was independently audited as recently as last month and there was no evidence that rules had been broken. “We abhor the use of prison labor and would never allow it in our supply chain,” the company said.

‘Ridiculous, Slander’

A representative for Zhejiang Yunguang said by phone yesterday that the report was “ridiculous and a slander.”

“Someone may be wanting to defame our factory and our country,” said the representative, who declined to give his name.

Calls to Shanghai Qingpu prison were not answered.

Tesco donates the money raised from such Christmas cards to the British Heart Foundation, Cancer Research U.K. and Diabetes U.K.

“Like Tesco, we’re shocked by these allegations,” the charities said in an e-mailed statement yesterdat. “We are in touch with Tesco, who have assured us that these particular cards have been removed from sale, and that the factory producing them has been suspended while they investigate further. We await the outcome of Tesco’s full investigation.”

Tesco shares were little changed yesterday morning in London.

The note, written inside a card featuring a cat in a Santa hat on the front, asked whoever found it to contact Peter Humphrey. Humphrey is a former journalist who spent 23 months in the same prison on what he calls bogus charges that were probably triggered by his work in China as a corporate fraud investigator. The girl’s father researched the name online and contacted Humphrey, who then wrote the story for the Times.

The father, Ben Widdicombe, told the BBC in an interview that Florence laughed when she first saw the note. The girl had been writing Christmas cards and told her mother, “Oh, Mum, look — someone’s already written in this card, isn’t that funny,” Ben Widdicombe said. “On reflection, we realized it was potentially quite a serious thing.”

Prison Work

Humphrey told the BBC he believes he knows who wrote the note “but I will never disclose that name.” When he was detained there, he said, prisoners had the choice to do manufacturing work to earn small amounts of money; he said the work now appears to be mandatory.

“These prisoners are living a very bleak daily life,” Humphrey told the network.

Forced labor in China is an enduring human rights issue that has plagued Western brands ever since the country became the factory to the world in the 1990s. The issue has received renewed global attention after reports that upwards of 1 million Uighurs, a Muslim ethnic group, have been detained by the Chinese government in internment camps where they’re forced to work as well as attend re-education sessions. Elena Mazneva, David R. Baker & Qian Ye, Bloomberg