Flat-pack furniture giant IKEA has admitted that East German political prisoners had been used to make its goods for as long as three decades.
In the latest in a series of scandals to hit the company, Ikea was found to have been aware of the potential use of forced labour by its suppliers in the former Communist bloc country as early as 1978 – and continued to source furniture from the German Democratic Republic until the fall of the Berlin Wall.
Swedish company IKEA, which is the world's largest furniture seller and recently announced plans to increase its number of stores worldwide by 50pc, said the report's findings were a source of "deep regret" but insisted it never condoned the use of political prisoners to make its products.
The use of forced labour in East German state-owned companies did not end until the fall of Communism in 1989.
The conclusions of the investigation by auditors Ernst & Young, which looked at 100,000 documents from the archives of Ikea and the German state, are deeply embarrassing for the company, whose corporate responsibility motto is "low price but not at any price".
Jeanette Skjelmose, the company's sustainability manager, said its staff had taken some steps at the time to ensure the use of forced labour was stopped by its suppliers in the former GDR but conceded they had been insufficient.
She said: "We deeply regret that this could happen. The use of political prisoners has never been acceptable to IKEA."
The presentation of the report took place a few metres from Checkpoint Charlie, one of the landmarks of the division of Berlin during the Cold War, where former Stasi prisoners said they hoped the study would lead to financial compensation.
IKEA did not touch on the issue of compensation although it said it would consider funding further research into the whole issue of forced labour.
The privately-owned company, which has 338 stores in 40 countries and made a profit of €2.6bn in 2010, said it was making a donation to UOKG, a German charity for victims of the former Communist regime, to support its research.
IKEA founder Ingvar Kamprad is no stranger to controversy, having been involved with a Swedish fascist group in the 1940s. (© Independent News Service)