What’s in a label?
For years, European Union countries have been bickering over legislation that would mandate marking country of origin on consumer goods sold within its borders, as opposed to keeping labels voluntary.
While the law would apply to a variety of products, in Italy, where family-run textile and apparel plants still dot the countryside, it has become a cause célèbre of the fashion industry. Along with Spain, Portugal, France and Greece, the country is part of a sizeable central-southern block pushing to make labels obligatory; northern neighbors such as Germany, the U.K. and the Netherlands, meanwhile, are among the most vocal critics of “Made In” labeling.
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In its most recent form, the “Made In” proposal is part of the Consumer Product Safety Regulation, which was put to a vote in the EU Parliament in April, with 485 in favor — 76 percent of the total — 27 abstaining and 130 opposed.
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According to data from VoteWatch Europe, an independent organization that promotes transparency in EU decision-making, no Italian members voted against the regulation. In addition, there was broad intra-EU support for it among the Progressive Alliance of Socialists and Democrats, the European United Left-Nordic Green Left and the conservative Group of the European People’s Party.
The measure is currently stalled pending the EU Council’s approval. While Italy presides over the Council through December, many fashion industry insiders are anxious about the legislation’s future.
“The ‘Made In’ legislation is a guarantee for millions of consumers,” said Claudio Marenzi, president of the Sistema Moda Italia trade association and high-end sportswear company Herno. “That’s something not just our own, but all the EU governments, need to keep in mind.”
He described product origin labels as a matter of “intellectual honesty.”
With consumer awareness of environmental and labor issues on the rise, “restricting this matter to private or public economic interests is not appropriate,” said Patricia Piñeiro Orellano, director of the domestic market and European affairs for the Spanish Federation of Footwear Industries, or FICE.
“This isn’t a rule that doesn’t exist yet — it exists, just not in Europe,” added Lara Comi, a center-right Italian member of the EU Parliament and staunch “Made In” advocate. “We are doing all of this activity, sure, for businesses, but mostly for consumers, who have a right to know how and where products were made.”
Many of the EU’s top trading partners, including the U.S., China and Japan, already mandate country-of-origin labels on imported goods. According to the U.S. Customs and Border Protection, labels on imported goods must have legible and permanent enough markings “for the ultimate purchaser to be made aware of the goods’ origin.”
“Made In” champions say it’s high time the EU followed suit. At present, there is no legislation regarding marking or labeling the origin of products imported into the EU.
“The national laws of the Member State concerned — as far as any such legislation exists — is therefore applicable,” according to the European Commission’s Taxation and Customs Union. A directive related to textiles requires labeling fiber composition, but not origin.
“All around the world, these labels are required,” said Cleto Sagripanti, president of Assocalzaturifici, Italy’s trade association of shoemakers, and also of Italian Holding Moda, a company that owns the Alberto Fermani and Les Tropéziennes brands. “When I want to sell something in China, I have to put [origin] labels on my products. We [Europeans] allow all sorts of things across our borders.”
Carmen Arias Castellano, general secretary of the European Confederation of the Footwear Industry, noted that country of origin labels facilitate “the traceability of the product back to the actual place of manufacture in case products have been found to be unsafe or inappropriate.”
In today’s global marketplace, European companies are exporting more than ever, and “they already need to include the origin on their products when reaching third markets. There will not therefore be any additional cost,” Castellano said, adding, “the administrative burden for companies is widely overestimated.”
“Origin is identified according to non-preferential rules, well known by manufacturers and importers, and they do not need to do any additional research,” she said.
On the issue of cost, Germany — which has been leading the charge against “Made In” labels — begs to differ. Felix Ebner, head of the department of trade and international cooperation at the Confederation of the German Textile and Fashion Industry, said many small weavers in Germany purchase thread without knowing the precise origin of the fibers, and that asking small- and medium-size businesses to “track the whole supply chain” would certainly raise their operating costs.
He also said Italy’s portrayal of the issues at stake is misleading.
“The best argument against ‘Made In’ is that you don’t inform the consumer about the real origin of the product. A suit or a shirt is not made only in one country,” he said, and so “in the end, you cannot really say which country it’s coming from.”
In Germany, he estimated that 120,000 people work in textile and apparel manufacturing, and the majority are employed in fabric production, weaving and finishing.
“We are not against the general aim of informing consumers, but we have to find the appropriate way of achieving it,” Ebner said, noting that most northern European countries would support more uniform EU labeling regulations, but not the current “Made In” proposal.
International non-preferential rules of origin state that: “If two or more countries are involved in the production of goods, the concept of ‘last, substantial transformation’ determines the origin of the goods.”
Applied to the textile and fashion sector, Ebner said these rules would ultimately render an origin label meaningless due to the significant number of different manufacturing stages involved. Asked why Europe couldn’t apply similar labeling rules to those required in the U.S., Ebner said that the U.S. “is a totally different market, with a very protectionist trade policy” and that it was not comparable to the EU.
Comi said there are numerous parallels to be made between labeling in textiles and fashion, and in other industries — for instance, in the agricultural and food sector, or the artisanal construction sector. The rules of origin apply to all sorts of products, she said, and dismissed criticism on these grounds as “nitpicking.”
“Why would the truth create prejudice?” she asked. “If a Chinese product is appealing, customers can go ahead and buy it.”
Italy, she noted, is unusual in that its own “Made in Italy” label is a quasi brand in and of itself, associated with high quality and beautiful design.
Other countries often rely more on European company names to promote their products, even if these are made outside Europe, she contended.
Germany isn’t a lone wolf in the debate, however. In the U.K. — namely in the east Midlands, London and Lancashire — about 9,000 people are employed in the supply side of footwear, half of them in manufacturing, said Richard Kottler, chief executive officer of the British Footwear Association, which counts 165 members.
“The BFA supports the U.K. government line, which is broadly similar to the German one but with the additional point that we believe that there is sufficient U.K. legislation covering this topic to make additional EU regulations largely unnecessary,” Kottler said. “There is broad agreement between all parts of the U.K. fashion industry on this point.”
A 2012 EU Commission study found that 96 percent and 91 percent of EU citizens respectively cited quality and price as important considerations when buying food, and 71 percent also cited product origin as significant. While non-food origin labels are not yet mandatory across Europe, many Italian fashion executives are convinced that consumers would favor them.
Consumers are very attentive to where apparel and accessories are manufactured, “especially in footwear, because the shoes produced in certain countries contain high levels of harmful chemicals that aren’t allowed in the EU,” said Sagripanti.
Orellano of FICE said that ultimately “it is the brand that guarantees the quality of the product it sells, wherever the place of manufacture may be.” Companies that invest in corporate social responsibility, she said, can “reinforce their reputation and transform the fact that they manufacture in a certain place into an added value.”