Ebrahim Patel, General Secretary of the SA Clothing and Textile Workers' Union (SACTWU), has reported a 40% reduction in imports from China and other countries. I give caution that these cut-backs should be seen as temporary measures while buyers for the retail chains re-strategies their supply sources.

South African retailers have already declared that they will purchase from countries such as Bangladesh and Vietnam, where not only is the cost of labour cheaper than in China, but safety regulations are blatantly ignored and child labour is regularly used. What will SACTWU's response be when imports from these countries begin to increase? The stance taken by national leadership in 2006 will also be tested, with South Africa's Deputy-President Phumzile Mlambo-Ngcuka having described such actions as "treason", and Mr. Rob Davies, the Deputy Minister of Trade and Industry, threatening to "take action" against these retailers.

Mr. Iqbal Sharma, Deputy Director of the DTI said in a statement about Chinese import quotas that he was pleased about the support for the local clothing industry demonstrated by some of the larger retailers, such as Foschini, Pepkor and Woolworths, even though the availability of locally designed content in these stores has been limited.

I, for one, am gratified that Mr. Sharma has publicly fore grounded numerous issues raised in my study on the South African fashion industry, saying that designers need to achieve economies of scale. My study identifies the importance of South African designers working in greater collaboration with each other to create this kind of business environment for the sector, and the usefulness of umbrella labels in generating influence in the value-chain. Such collaboration could enable local designers to meet the highly competitive price demands dictated by the global and local economy, as well as the production and delivery needs of the retailers.

Sharma has also commented that "Woolworths and Edgars do stock garments from a handful of original South African designers in some stores, but the terms of these arrangements discourage local couturiers." My research substantiates these concerns: designers informed me that retail chains dictate stringent terms for order placement, with the attitude that many other designers were queuing for such opportunities for visibility in the chain-store environment as a sure means of increasing their market share.

The price of locally designed content showcased in these stores is still expensive compared to products imported from Asia; it would be interesting to know how many units of local origin are sold and exactly how many local designers are given space in these stores. Further research is essential to evaluate the actual financial return for these designers, and to determine whether their exposure to the market via these channels outweighs the economic constraints imposed on indigenous output.

In the same statement, Sharma mentioned that it was imperative for designers to expand their markets and move from being dependent on "little boutiques." My research indicates that a number of designers have trouble in dealing with the smaller boutiques, mostly so when it comes to payment for their merchandise. Numerous participants informed me that the boutiques pay them only once the merchandise has been sold and this adversely affects their cash flow. This highlights the need for boutiques to move from taking local designed content on consignment to buying the stock outright. From the perspective of the boutiques, my findings were that boutique-owners are exasperated at the lack of business skills of many South African designers. They complain that many emerging designers do not keep to delivery dates, the quality of their products is not consistent and even though the boutiques wish to support new talent, they prefer to provide space for more established designers who can be relied upon to meet the business and quality standards required by the boutiques.

An article indicated the possibility of more foreign retailers entering the South African market. While this may increase employment opportunities for the retail sector and provide new shopping experiences for higher and middle-income consumers in South Africa, such development is likely to constitute further competition for South African designers, so nullifying Sharma's complaint about the "dearth of local clothing designs in the listed retail sector." Will the DTI and SACTWU demand some form of concession from Gap, Mango and Zara to house and manufacture a certain percentage of authentically "Made in South Africa" content in their shops or under the brand labels?

Developments relating to the origin of imported goods were also covered in recent reportage, stating that manufacturers and retailers who "passed off foreign-made clothing as locally produced would face penalties of up to three years in jail and a R5 000 fine", according to a government announcement. New labeling regulations already in operation and evidential in some if not most of the major retail chain stores have been initiated to stem the tide of illegal imports. Numerous key figures in the industry inform me that importers are placing "Made in South Africa" labels onto partly-made merchandise, on which, for example, only the buttons have been sewn onto garments in South Africa. Their view is that threats by the government will not stop this practice.

Unconfirmed rumors surfaced while I was undertaking research on KwaZulu-Natal clothing manufacturers that stock from China is still being imported into South Africa, but is being re-routed through India, Swaziland and Malawi. It is questionable whether South African customs officials, the SA Revenue Service (SARS) and even the DTI have the resources to monitor all clothing and textile imports passing through South Africa's borders.

In the same media report, SARS accused smaller retailers and importers of "failing to declare clothing imports." My ongoing research of smaller boutiques that stock mostly imported merchandise shows that many of these outlets currently do not comply with any label regulations. Moreover, many of these stores do not have a "Made in  label at all, presenting only their own brand label so that the consumer cannot determine where the garment has been made. Will the government initiate a special task force to monitor these stores, patrolling the shopping malls throughout South Africa, pulling garments off the racks, scrutinizing the labels and bringing these store-owners to book? Could consumer activism be supported by government, in the form of a toll-free "whistle-blower" line enabling Proudly South African consumers to report on non-compliance?

About Author:

Renato Palmi is Researcher, Business Development and Network Strategist (Clothing, Textile and Fashion Industried and NGOs). He can be contacted at yakshack@iafica.com

The article has been published in The Redress Report offers contemporary analysis of developments in the South African clothing, textile and fashion industries aimed at encouraging critical and constructive debate relating to these industry sectors.

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