Otto Group Statement on Royal Knitting Thailand – BAFA Review Process Concluded
The “Clean Clothes Campaign Germany / Kampagne für Saubere Kleidung e.V. (CCC)” accuses the Otto Group of failing to meet the wage claims of former Royal Knitting factory workers in Thailand, or at least to advocate for them, contrary to its alleged legal obligations and actual capabilities.
This accusation is inaccurate and unjustified. A review process initiated by the German Federal Office for Economic Affairs and Export Control (BAFA) has also concluded; the authority confirms that the allegations made have not been substantiated.
The Otto Group has always met all of its payment obligations. The employees' legally titled claims for unpaid wages are directed solely against the Royal Knitting factory and relate to services provided in 2020. The Otto Group’s business relationship with Royal Knitting factory was completely terminated in 2017. Since then, no goods have been produced there for the Otto Group. The Otto Group cannot assume the obligations of third parties that arose years after the business relationship ended and are not related to it.
The Otto Group has always taken the statements of the CCC very seriously and has thoroughly investigated them. Our detailed checks have not only confirmed that our business relationship with the Royal Knitting factory ended in 2017 but also failed to provide sufficient evidence that goods were manufactured at the Royal Knitting factory after 2017 without the Otto Group's knowledge. Our records show that the goods in question were manufactured at a different factory duly commissioned by our business partner.
In addition, we have reports from the quality manager who conducted the final on-site inspection of the goods in question and confirmed that they were not produced at the Royal Knitting factory. Furthermore, collection notes from the logistics company confirm that the goods were collected from the factory originally commissioned – not from the Royal Knitting factory. The copies of labels and data sheets submitted by the CCC also do not allow any reliable conclusions to be drawn about production at the Royal Knitting factory after 2017. These documents cannot be verified as they could have come from anywhere, including remaining stock from older orders. This means that, by the time the factory closed in 2020, the Otto Group had not had any goods produced there for three years. We are therefore unable to comment on the events in 2020 to which the CCC refers.
The Otto Group has always fully complied with its contractual and legal payment obligations. Throughout our collaboration, we have also consistently advocated for fair and safe working conditions for employees.
We have always rejected the allegations made against us by the CCC over the past few years as false and unjustified. For this reason, we took legal action against these false claims in the summer of 2024. The CCC subsequently signed a cease-and-desist declaration with a penalty clause.
Despite these facts, the CCC continued to insist on its demands and held the Otto Group responsible for payment claims from 2020, even though the business relationship had already ended in 2017. However, this view was completely unfounded. We cannot assume the legal obligations of former business partners.
Such an obligation did not arise for the Otto Group from the Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG) either, which only came into force in 2023.
The Otto Group furthermore strongly rejects the allegation of exerting undue legal pressure. Instead, we felt compelled to initiate legal steps to respond to defamatory and demonstrably false statements. This was necessary to uphold the company's integrity and to prevent the further dissemination of inaccurate statements. The cease-and-desist declaration issued by the CCC confirms that the Otto Group rightly pointed out justiciable false statements. Seeking legal assistance to enforce legitimate claims does not constitute undue pressure but is a legitimate means to correct false allegations.
Finally, we would like to emphasize once again that the Otto Group has been committed to improving working and environmental conditions in its supply chains for many years and works closely with suppliers and other relevant partners to ensure compliance with its standards and applicable national laws and regulations.
Following a tip-off, the BAFA, as the competent authority responsible for enforcing the LkSG, opened a review process in 2025 and requested information from the Otto Group. The review process has since been concluded; the BAFA has informed us in February 2026 that the allegations against the Otto Group were ultimately not substantiated.