This year’s Tear Fund Ethical Fashion Report, released in conjunction with World Baptist Aid Australia’s well-established Behind the Barcode project, caused a major stir. Over 100 companies were featured in the report, including 18 specifically Kiwi-owned companies, and while Icebreaker and Kathmandu received A+, some well-known high end brands didn’t do well at all. Karen Walker scraped across the ethical line with a C, while Ruby received a D and most shockingly, Trelise Cooper received an F, largely a result of non-participation*.
Dame Denise L’Estrange-Corbet, one of New Zealand’s most outspoken fashionistas, was red hot in her response. The co-founder of ethical clothing brand World hit out at her fellow Dame on a RadioLive interview:
“Trelise Cooper came out and said she was deeply serious about social responsibility. Well if she was, then she wouldn’t be manufacturing in a third world country,” she said in April.
Then in May, alternative news site The Spinoff revealed that some of World’s clothing was manufactured in Bangladesh and Hong Kong, and had been for seven years. The Commerce Commission received nine related complaints and their investigation is ongoing.
World was unavailable for comment on this matter, but in a subsequent NewstalkZB interview, L’Estrange-Corbet said the company had been forced to move its manufacturing overseas due to a lack of facilities locally, and that the factory had been checked for its ethics. She insisted the majority of her clothes were made in New Zealand and that she had discontinued some lines because Kiwi manufacturers were no longer available.
Crucially, she stated that the swing-tag on World clothing reading ‘Fabrique en Nouvelle-Zelande’ – the company’s strap line - was not misleading for the consumer as the original tags stating the country of origin remain in place.
As much as I am a crusader for ethical clothing and business transparency, I do have a modicum of sympathy for World. With 99 percent of their clothing manufactured in NZ, previously 100 percent, the brand catchphrase ‘Fabrique en Nouvelle-Zelande’ makes sense. But is it legal? And are other retailers falling foul of this issue?
Here is our handy guide as to what it means to be a retailer who sells locally manufactured products, what the benefits are for your business, and how you can stay within the law.
Why ‘made in New Zealand’?
New Zealand’s famous ingenuity comes from the fact that back in the day, we pretty much had to make everything ourselves. That was the price you paid for living a safe distance from the rest of the world. However, globalisation and the internet have opened up international markets, both direct to consumer and to the retailer. Even manufacturers have more choice over where they source their raw materials, and it could be more cost effective to buy from overseas.
When Phil Bramley started Private Collection, a ‘made in New Zealand’ knitwear company in 1982, he didn’t do it for ethical reasons.
“Duties on imports were higher back then, and New Zealand had a strong knitwear manufacturing industry. It wasn’t a conscious decision to buck the trend.”
Private Collection manufactures for corporates, and designs its own two labels Visage and the well-known Standard Issue.
Bramley says they started as a more generalist manufacturer, but in the late 80’s the stock market crash lead to a lot of factories closing down and importers opening up.
“We started to see price reductions, and a lot of manufacturers moved their operations to China. My passion was making good knitwear, and I had a loyal bunch of staff. I didn’t see China as an option, but I started to see a niche opening in the market we could fill.”
Bramley says that customers expect a garment made overseas to be 25 percent to 30 percent cheaper to buy than a garment made locally – and customers demand a higher quality product from local manufacturers, a product they hope to still be wearing in five or even 10 years’ time. The premium you can place on a locally made product is often the driver for manufacturers and retailers to use that as an advertising claim.
“Some consumers are happy to pay a higher price for goods which they believe are made in New Zealand, and for some this represents an important ethical decision,” says Commerce Commissioner Anna Rawlings. “Country of origin claims are important for local manufacturers that want to protect the value placed on a genuinely New Zealand made product.”
If the phrase ‘made in New Zealand’ is abused, then consumer trust will be lost. Look at China, where the consumer is so suspicious many people use a personal shopper or ‘daigou’ to purchase product that’s supposedly more trustworthy from overseas. Clearly, authentic labelling is important, but with cotton coming from India and coffee from Colombia, how can you be sure your made in New Zealand claim is accurate and legal?
"Whether a product is ‘made in New Zealand’ depends on a number of factors, including the nature of the product and what consumers understand about it. For example, if it’s a clothing garment, where was it changed from fabric into a garment? If it’s food, then where was it grown?” says Rawlings.
If you are selling a product, such as coffee, that was sourced from another country but turned into a useable product in New Zealand, you may wish to describe it by saying ‘roasted’ in New Zealand, rather than ‘made’. If you are making T-shirts in Hokitika from material processed in Ho Chi Minh City, it might be prudent to state that – after all, no one wants to mislead their consumer. And if you do, you are likely to fall foul of the law.
“Any ‘made in New Zealand’ claims businesses make about their products must be accurate, able to be substantiated and must not mislead consumers about the country of origin,” says Rawlings. "The Fair Trading Act (FTA) prohibits businesses from making false or misleading claims about the country of origin of their products. Symbols such as kiwis or the New Zealand flag can also convey a misleading impression about the origin of the product if, in fact, it is not manufactured or produced in New Zealand.”
Tony Dellow, a partner at legal firm Buddle Findlay and leader of the consumer law team, says his team works with many businesses who come to them for advice on where they stand with ‘Made in New Zealand’ claims, both before they print the packaging, and sometimes once they’re already in a spot of bother.
“It really does depend on what the product is,” says Dellow, who notes there is no clear-cut legal definition of what a made-in-New-Zealand product is. “For example, with food products, people really do care about the source of the raw materials. You’d expect the majority of them to have been sourced from New Zealand. On the other hand, we act for a furniture retailer, and the issue is not so much where the materials came from but where the workmanship was done.”
Dellow says that sometimes they can make a call based on their legal experience, and end up disagreeing with the Commerce Commission because the opinion of someone who works there differs.
“There’s a touchstone, and that is [the question] what’s important to the consumer? Buying locally is becoming more important to people and businesses want to be able to make that representation because they believe it may make [the product] more attractive – but they don’t want to break the rules.”
He has three pieces of advice. First, make yourself familiar with the Commerce Commission’s fact sheets. Second, look at the product and consider objectively to what extent it has been made in New Zealand. Finally, state on your label that, for example, a product is made in New Zealand from imported materials. If you can’t decide, then seek advice from a lawyer.