Two JSE-listed clothing retailers and various smaller apparel groups may have violated apparel label regulations, but the Department of Trade and Industry (dti) is preparing to launch a task team next month to address this problem.
Recently Durban-based clothing and textile researcher Renato Palmi inspected a range of garments at Young Designers Emporium (YDE), a subsidiary of Truworths, and found that "very few of the garments bore country of origin labels".
Palmi said that "Made in SA" labels were evident but the source of the fabric or whether the textiles used were local or imported could not be verified. Palmi said he had similar findings at fashion retailer Mr Price, also a large importer of garments and fabrics from east Asia, as well as The Platinum Group subsidiary Vertigo.
"In 2008, the government announced that goods must be labelled in terms of their country of origin, as part of the Merchandise Marks Act," he said. According to the regulations, all items of merchandise are required to bear a label indicating the country of origin, whether imported textiles were used to make them, the fibre content and care instructions.
To ensure compliance, the Department of Trade and Industry and the SA Revenue Service carry out inspections at retail outlets and if apparel does not meet the label regulations, companies face fines of R5 000 per item or imprisonment for three years, or both.
Alastair McArthur, the chief executive of Mr Price, said the company distinguished between what was made in South Africa and what was made elsewhere. "With regard to these findings, we would need an SKU (bar code) number to verify this case," he said. According to McArthur, the company sources most of its fabric from elsewhere as the kinds of fabric it needs are not available locally.
Truworths responded that YDE operated under a different business model from the company's other stores, such as Uzzi and Identity. "The independent designers are contractually bound to adhere to labelling regulations. YDE store staff are tasked with attempting to ensure these regulations are adhered to... however, it is difficult to implement with 100 percent certainty given the volumes involved."
JSE-listed Truworths said about 95 percent of the garments were produced locally, while most of the fabrics were imported. Vertigo had not commented at the time of going to press.
Etienne Vlok, a senior researcher at the Southern African Clothing and Textile Workers' Union (Sactwu), said proper enforcement for these infringements was pivotal as Sactwu had found a strong correlation between non-compliance with country of origin labelling and customs fraud.
The second industrial policy action plan, launched in February, remarks on the urgency with which the non-compliance with country of origin label rules needs to be addressed. Johann Baard, the executive director of the Apparel Manufacturers of SA, said non-compliance with the country of origin labelling rules was widespread among retailers. "We have reports (that) confirm that there are large, JSE-listed retailers who are not complying," he said. He said more than 70 percent of local clothing manufacturers imported fabric from elsewhere, but often this was not apparent on the garment.
Sipho Tleane, the director of legal support and prosecutions at the Department of Trade and Industry, confirmed that an urgent action plan to police non-compliance was under way. "I have prepared a report suggesting some strategies for the plan following our surveillance of South African retailers," Tleane said.
According to Tleane, the department will look specifically for warehouses where retailers store imported clothing while clandestinely sewing on labels. He said smaller retailers and boutiques in particular were guilty of this violation.
Published on the web by Business Report on April 8, 2010.
COMMENT FROM ReDress Consultancy
This is an example of how the media can get a few facts wrong. The statement "very few of the garments bore country of origin labels" is somewhat misleading. The findings of the study reflected that the larger retailers have "Made in" labels but the majority of the garments have a label indicating "imported textiles." Some garments from YDE did not have care labelling. The smaller private owned boutiques were not fully compliant with the label regulations.
The study poses the following questions:
1. Why are South African designers using imported textiles? Is it because of the cost, the lack of variety from local textile mills or a poor marketing strategy from the South African textile industry?
2. Are South African consumers really interested in labelling? Would the promotion and marketing of why labelling is important in the context of supporting the local clothing and textile industry sector which in turn creates and sustains employment be beneficial to the South African clothing and textile sector?
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