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Divisions as law on country of origin labels gets closer

Legislation that could force brands, manufacturers and retailers to badge their product with country of origin labelling moved a step closer last week.

The European Parliament’s vote on October 21 to support plans for compulsory ‘Made in’ labelling on all imported goods has reignited the debate about what impact this could have on fashion businesses and consumer shopping behaviour. If the proposals go ahead in the next few years, clothing, footwear and other textiles from outside the UK will have to carry labelling which states where they were made.

Informed choices

While many brands and fashion businesses manufacturing in regions such as Italy and the UK have long been using country of origin labels as a selling point and marketing tool, some countries have associations with lower quality, exploitation of labour and even unethical manufacturing processes.

Supporters of the ‘Made in’ campaign say it is in the interests of consumers to know the country of origin so they can make properly informed choices when buying.

Harrods fashion and beauty director Marigay McKee says: “Heritage and provenance is always valued by our customers; it denotes the history, craftsmanship, quality and the time that has gone into creating a beautiful garment.

“Lots of companies already do this and have recognised the importance, promoting this as a unique selling point. For instance, ‘made in England’ for a classic trench, ‘made in Scotland’ for luxurious cashmere, and ‘made in Italy’ for exquisitely cut tailoring and the finest fabrics. This does not particularly resonate with the high street, where time is of the essence and constant newness key. But in the luxury market, country of origin is of the utmost importance to the saleability of a garment.”

The proposals were first put together in 2005. However, the proposed legislation by the European Commission still has to be ratified by EU member states, and it’s unlikely any changes will be made in the near future and it could be 2012 before they are passed and even later before they are put into action.

However, they are being vehemently promoted by European countries, notably Italy, which has long-established associations with quality fashion.

Opponents say the proposals are a protectionist measure designed to stop competition from cheaper imports. EuroCommerce, the trade association which represents the retail and wholesale sectors in Europe, calls it a “serious mistake”.

“It’s costly to implement, bureaucratic and unnecessary and is a barrier to trade,” says EuroCommerce senior adviser on international trade Ralph Kamphöner.

Cost of quality

There is no doubting the cachet that can be instilled in some products by promoting country of origin. Since the recession, many brands and retailers have moved towards heritage product in the hope that shoppers will buy investment pieces.

A spokeswoman for premium etailer My-Wardrobe says: “Shoppers want the quality that is implied by that and understand it might be more expensive because it costs more to make it in the UK. It’s the same with Italian, French and Scandinavian brands.”

However, there is a rolling debate about how interested high street shoppers and those shopping in the value sector are in where products are made and the impact it has on what they buy. Consumers polled by Drapers on the issue generally said country of origin was less important to their high street purchasing habits (see box).

At contemporary womenswear indie Fall Woman in Knutsford, Cheshire, manager Pauline Tyrer says origin labelling is not so important. “It’s never been an issue for my customers,” she says. “If the product is in my store then it has credibility with the shopper because they know I look for quality. They might ask where a certain designer is from because that’s interesting, but not where it’s made.”

But some who oppose the proposals say that whether shoppers care about where a product is made is a moot point because the labels themselves have little meaning.

Determining the country of origin can be complicated, especially when more than one country is involved. The proposals aim to use the World Trade Organisation’s existing definitions for European Commission non-preferential rules of origin, which deem the country where the product underwent the “last substantial transformation” as the country of origin.

However, Kamphöner says the idea that this gives consumers more transparency about origins doesn’t make sense. “The manufacturing process is so globalised now that you can get a raw material from one country, the yarn is made in another, the fabric in another and it is then put together in a different country. So labelling with one country is not really informing the customer; in fact it’s actually misleading.”

UK Fashion & Textile Association chief executive Eric Musgrave says that, traditionally, the trade body has opposed the imposition of compulsory origin marking, but it is likely there would be a variety of opinions among its members, from those that manufacture in the UK and would favour labelling, to importers that see it as unnecessary extra headache.

Putting on pressure

Musgrave says: “I’m not convinced that origin marking would affect consumer purchasing behaviour very much. It would also be extremely difficult to decide on the criteria that define the designation ‘Made in’ and it would be extremely difficult to police. But clearly pressure groups in southern Europe are pushing for this, so those that oppose it need to make their voices heard also.”

Stephen Sidkin, partner at solicitors Fox Williams, says increased labelling means increased potential legal implications for brands and retailers, too. “If you are selling something with a label saying it’s made somewhere and you have a visit from Trading Standards and it turns out it was made somewhere else, you could have a problem,” he says. “There would also be increased costs associated with the labelling, dealing with any Trading Standards issues, and those extra costs have to be passed on, probably to the consumer.”

Neil Sutherland, buying director at premium indie Kafka in Aberdeen, says: “It can be a nice selling point to say ‘Made in’ but those products are generally more expensive. If everyone ends up having to comply then we as retailers have a choice whether we want to continue to buy the brand and hope people can judge by quality and design, because there’s nothing to say that some of the Far Eastern countries don’t make quality.”

The proposals

What is the legislation?

  • Labelling of country of origin on products imported into the UK originally proposed by the European Commission in 2005
  • First reading of proposed legislation passed in the European Parliament in October 2010
  • The regulation requires “finished or semi-manufactured” products imported into the EU to be labelled with the country of origin

What next?

  • If MEPs accept the proposed legislation then the regulation will proceed to become law, although this is unlikely to occur before mid-2011. The proposed regulation is likely to become effective at an even later date
  • If MEPs do not accept the proposed legislation then the proposed regulation will return to the European Parliament for a second reading

Do shoppers care where clothes are made?

Caterina Baldacci

Age: 27

Occupation: trend analyst

“For me it’s more about the look and the price of clothing. I never look at the label to check for product origin, certainly not while shopping on the high street. If it looks fashionable and cool and it’s a price I can afford, I will buy it.”

Bauhinia Lee

Age: 19

Occupation: student

“A label of origin is important for high-end and luxury, especially when it comes to shoes and bags. If I’m buying a well-known luxury brand and notice the shoes are made in China I will definitelybe suspicious. We should be supporting British brands that are made in the UK.”

Lorraine St Pierre

Age: undisclosed

Occupation: former fashion retail owner and buyer

“I think label of origin is all about being honest with the customer. People can accept any origin as long as the shop is honest, knowledgeable and open about how that product has been produced. Ignorance is a problem among customers as they are assuming that just because one brand has a bad reputation [for exploiting] developing countries, everybody else is doing it.”

Tatiana Statilko

Age: 32

Occupation: manager

“I don’t think a label detailing the origin of an item is important when it comes to the high street. People know that cheap price means ‘made in China’. When you see ‘made in China’ on a luxury product, then it becomes a problem.”

Jamie-Rose Duke

Age: 17

Occupation: student

“I never check where the clothes I buy are coming from and for me it’s not really a problem as I shop mostly on the high street. Style and price are the most important factors for me. If I was buying into a brand, however, I would expect the product to be made in that brand’s country of origin.”

Samantha Ward

Age: 17

Occupation: student

“Product origin is certainly less important on the high street but when it comes to luxury brands then the quality is as important as the country of origin. If I’m paying a lot for Burberry shoes, I don’t want them made in China.”

Anne Hennessey

Age: 62

Occupation: retired head teacher

“I always check the label. I believe brands should be made in the country of origin. When I buy into a French brand I expect its product, clothing and accessories alike to be made in France. The same goes for British brands like Burberry.”

Readers' comments (2)

  • This will make no difference to the lower/value end, but could have some consequences further up the scale with some brands. However these days most customers concentrate on whether the garment is well made, irrespective of where it was manufactured. The snobbery days of consumers wanting 'Made in the U.K' are long gone and have accepted that other countries can done things better and cheaper.

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  • Has anyone considered the flip side of this. Companies that are counterfeited extensivly have a potential bonus in product identification. Knowledge of your production base and supply chain could mean that when you know where your garments are made, a garment sent for authentication is very quickly picked up. For example if you only make in say China and Turkey, garments with a "Made in Pakistan" or "Made in Bangladesh" or even "Made in the UK" can be very quickly and positivley identified as being counterfeit. Sure, copies are getting better and there is nothing to stop the counterfeiter copying the "Made in.. " label, but if you know your supply chain and have control of it, there may not be such a negative side to a country of origin label. Lawyers love it when you point out things such as "We dont make items in..... "

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