The real value of “Made in…”

...when examining the fine print on where your garments are made, things quickly become lost in translation.

by Maxwell McBride Peterson
How well do you know your own clothes? Do you usually read the tag before purchasing to see the country of origin? More often than not, we as consumers are ambivalent about where our clothes are manufactured. But this is changing, as a society, we are beginning to challenge the ignorant system. A spillover effect from the food industry has created a mini-boom of labels and companies worldwide that are proudly trumpeting their provenance. In fact, ‘local’ is fast becoming a standard unique selling point for almost anything. But when you dig deeper, the problem gets more complicated.

For decades the fashion industry has been producing its garments in developing countries. China, Bangladesh, India and Cambodia all offer low labour costs, a seemingly endless workforce and reasonable shipping costs – China alone amounts for a fifth of all manufacturing globally. But in the last few years, with the rise of oil prices and transport costs worldwide, these attractive margins are shrinking. Costs associated with land, environmental and safety regulations as well as production taxes have also seen a hike, which is making manufacturers rethink their supply chain strategies. A return to domestic production has been seen across the world, from America to the United Kingdom, and seems to be here to stay.

The budget speech by UK chancellor George Osbourne had one fil-rouge throughout – "We want the words 'made in Britain, created in Britain, designed in Britain, invented in Britain' to drive our nation forward." This call to action was not unheeded. The British Fashion Council’s Report on The Future of Fashion highlighted a rise in domestic fashion manufacturing from 2.0 to 2.5 per cent. Also, predictions indicate that by 2015 UK fashion manufacturing will contribute 2.1 billion to the GDP and employ nearly 70,000 people. This of course is promising. A brand returning home will increase their brand equity and gives them a certain cachet – something essential in the fashion industry. But certain questions are beginning to crop up. Burberry still makes its iconic trench on British soil. Mulberry does the same – manufacturing 30 per cent of their fashion forward bags at their factories in the Mendips. But Mulberry is foreign owned and Burberry still manufactures well over half of its garments overseas. Does this take away from the attractive Britishness of the brand? Even Sir Paul Smith, the golden boy of Britain and a fashion ambassador for the UK, designs in the UK but manufactures in Italy. So do these factors have weight on how we as consumers view these brands?

The UK is not the only country experiencing these woes. Italy has long been celebrated for retaining its manufacturing sector inside its geographical borders – in 2011 it employed some 447,000 people and generated a turnover of €52 billion. Yet even Italy has has been experiencing its own “Made in…” crisis. Prato, a major manufacturing hub in Italy has been fiercely protectionist about retaining their “Made in Italy” status to the point where outsourcing has come to them. The city is facing a culture clash as roughly 15% of the population – an estimated 25,000 Chinese migrant workers – have poured in to work the city’s garment and textile factories. This makes Prato the home to the largest concentration of Chinese people in Europe, and an educational goldmine. Many migrant workers have come over – legally and otherwise – to learn from Italian craftsman before striking out and establishing their own form of “pronto moda” – fast fashion.

By mastering the supply chain they have drastically slashed the overall production time - it only takes two weeks to produce a catwalk ‘patterned’ garment in Prato, compared to the two months it takes back in China. Using homegrown connections, they are able to source cheap cloth, dye it to spec, use local trimmings and sell to European buyers all under the “Made in Italy” label. This situation is estimated to channel $1.5 million of profit a day to China – with the wages steering clear of the local economy, as the Chinese prefer to repatriate their earnings.

Policy makers are addressing these issues in both Italy and the UK, but the broader topic seems to require a re-evaluation of the ‘Made in…’ labelling concept. As country of origin lines are becoming increasingly blurry and the majority of production now takes place in low-labour cost countries, with finishing treatments completing the garment in Europe to add value, how much traceability should be involved in fashion? What is the long-term fate of fashion manufacturing in post-industrial countries, and does it warrant concern? As the ‘locavore’ continues to value and seek out products with intrinsic heritage that are domestically produced, will this create a more transparent attitude towards production, or continue the hunt for the lowest bottom line? A fundamental change is afoot, but the processes behind need to be clarified before a real difference can be made within the industry.