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Unless you’ve been living off-grid for the last month, you will have heard that New Zealand fashion label World, along with some other Kiwi fashion labels, has come under fire for its labelling.
World, which has built much of its brand equity from manufacturing its clothes onshore in an industry that is increasingly doing it overseas, put swing tags on its clothing that stated “Fabriqué en Nouvelle-Zélande” (“Made in New Zealand”), while labels on the inside of the t-shirts showed that the garments were actually made in Bangladesh.
World is currently under investigation by the Commerce Commission.
NZ MADE COMPANIES TAKE CARE
With this news in mind, I spoke to the Buy NZ Made organisation’s Acting Executive Director, Anna Heyward.
Heyward sees the World issue as an illustration of the need for total transparency in the way businesses present their products and suggests that, more than ever, businesses need to be careful about the claims they make and where those claims are being placed.
For instance, what if most, but not all, of a company’s products are manufactured in New Zealand?
Does it have to be an all-or-nothing situation for a business to wave the New Zealand made flag?
Not really, but players need to be careful.
“If say, 95% of a company’s products are New Zealand made, they should be OK using our logo on the front of their website,” Heyward explains.
“And where they have individual products that aren’t New Zealand made, that needs be clearly stated.”
Complicating this issue are questions about what actually constitutes a New Zealand made product.
After all, some materials simply aren’t available readily available locally.
How about products that are designed or assembled here but use a mix of both New Zealand and overseas materials?
Using the example of a New Zealand made garden shed with a few imported nuts and bolts, Anna Heyward explains that these would not be considered key components of that product.
“Those nuts and bolts are fine as they aren’t the reason why people are buying that product and what forms its essential character,” she says.
WHAT MAKES NZ MADE?
Buy NZ Made’s Anna Heyward explains that there is no “precise formula” as such but that Buy NZ Made follows rules laid down by the Commerce Commission when determining New Zealand made status, who tell her that it comes down to a question of degrees.
“It all depends on the nature of the product and what consumers understand about it, she says.
“Assembling products in New Zealand is not enough to be called ‘New Zealand made’.
"If you have key materials or components that are imported and they form the essential character of the finished product they need to go through a significant manufacturing process in New Zealand so the finished product is distinctly different from the raw components for it to be called ‘New Zealand made’.”
For those players in our channel that have doubts, Anna Heyward explains that Buy NZ Made is here to help.
She points to an example from a few years ago where Buy NZ Made reached out to one of its licensees within the gardening category for non-compliance.
“In this case, the overall product probably didn’t comply so we worked with them to change the way they were using our branding.
"And, because most of the product was New Zealand made, they were still able to use our branding but specify which part was New Zealand made,” she says.
A MERCHANT’S TAKE
For a perspective from a hardware retailer, I asked Mitre 10’s Sponsorships & Communications Manager Alison Oldridge how Mitre 10 went about determining the legitimacy of New Zealand made claims.
Oldridge says that Mitre 10 works closely with suppliers to ensure that any product claims are truthful and explains that the company has several processes in place “to ensure relevant evidence considering material source and product manufacture is provided to us.”
As for the importance of stocking New Zealand made products, Alison Oldridge acknowledges that as a local business Mitre 10 does like to support fellow New Zealanders where it can but still has to take into account the needs of its customer base first and foremost.
This means offering a range of sourcing options to balance cost, volume and time factors.
“There are some customers who show a preference for NZ Made whereas others aren’t so concerned. What the product is and its purpose, is also a factor that comes into play here.
“However, for the most part, our research shows that the majority of customers are price-focused first,” says Mitre 10’s Oldridge.
NZ PRODUCTS OR NZ BRANDS?
ITM CEO, Darrin Hughes, on the other hand, has fewer compromises to make than the people at Mitre 10.
Timber makes up the largest product category for ITM and, with only a few specialist cedars currently imported, it’s a given that ITM aligns its preferences strongly with NZ made products.
That said, Darrin Hughes acknowledges that while the feel-good factor of supporting NZ made does come into play, for customers it’s all about fitness for purpose and a trusted local reputation.
Tools for instance are very rarely manufactured here but ITM still likes to work with solid and trusted brands which typically have either a New Zealand base or are NZ domiciled importers.
“So it’s not so much the New Zealand made components but the New Zealand reputation that’s critical for our customers” says Hughes.
With that in mind, I asked Darrin Hughes for his thoughts on the World fiasco.
In his opinion is it worse to manufacture completely offshore with total transparency or to manufacture 90% locally but potentially mislead the public about a few overseas made items?
“I don’t think there’s any issue with a strong New Zealand brand manufacturing offshore, where the scale of manufacture or the economics make it worthwhile but it’s the transparency factor which I think is important,” he says.
“And if being New Zealand made is a big part of your brand image and then something disappoints the public because they find part of your portfolio isn’t, then I think you lose some trust and potentially break a connection with your target market.”
JUST MAKE SURE IT WORKS
Moving to PlaceMakers now, General Manager Operations & Marketing Gary Woodhouse, like Darrin Hughes, is also happy to supply mostly New Zealand made products.
Again, however, he makes no qualms about this being a purely practical rather than emotional choice.
“What’s really important for our customers is that they can use products that are fit for purpose and NZ made products absolutely meet that criteria,” he says.
“Our products are equal to anything you can see around the world and while there are a number of alternative building products that aren’t made here, in our experience there is a difference in quality,” says Gary Woodhouse.
Of course, as mentioned earlier, sometimes the lines around what counts as truly New Zealand made get blurred. How does PlaceMakers go about tracking and tracing the origins of some products if questions arise?
Gary Woodhouse admits that going backwards down the supply chain isn’t always easy but that PlaceMakers has a policy of asking the appropriate questions and looking for certification as and when needed.
The difficulty this imposes is the main reason Woodhouse puts great stock in working with reputable and well-known brands.
As for reports that New Zealand manufacturing is in trouble, Gary Woodhouse paints a different picture, at least in the hardware channel.
“Some people are saying New Zealand manufacturing is dying but I don’t see that at all.
“We’ve got some very strong and responsible manufacturers and in our industry that’s really important.
“I think New Zealand manufacturers should feel very proud about what they manufacture because it is as good a quality as you’ll see in the world!”
Where did it really come from? Can blockchain help?
Whether part or all of a product comes from New Zealand or somewhere overseas, retailers, consumers and suppliers alike want to know exactly where something has been these days.
For anyone who wants to work backwards along a product’s supply chain to find its country of origin their first port of call is the ubiquitous barcode.
The barcode system we currently use was developed in the mid-70s by GS1, an organisation that develops and maintains “global standards for business communication”.
GS1 NZ’s General Manager Customers, Gary Hartley, explains that GS1’s key role is to provide the fundamentals of track and trace solutions for product supply chains, giving information on “what something is, where it’s been and when”.
Hartley explains that while it is possible for fly by night operations to surreptitiously use somebody else’s barcode on their products, GS1 has systems in place that make this incredibly difficult. Even for those who do manage it’s only a matter of time before it gets picked up in the supply chain.
With the recent news that Blackmores and Fonterra would be trialling Alibaba Group’s new Food Trust Framework that uses blockchain technology to improve supply chain traceability, I ask Gary Hartley what the implication for blockchain really is for track and trace.
He explains that while blockchain records are impossible to tamper with, the data put into those records in the first by a supplier can still be false!
“In many instances the data that is set into a blockchain is GS1 identifiers that identify what something is, where something is and maybe a time stamp. So when that is posted to the block and is recorded, you can’t change it but that data comes from somewhere in the first place and who’s to say that data is legitimate.”
For more information on blockchain and how it works click on the following shortened URL.
Buy NZ Made turns 30
This November will mark the 30 year anniversary of the Buy NZ Made campaign.
The campaign was launched in 1988 by the NZ Council of Trade Unions and the NZ Manufacturers’ Federation as a response to concerns by local businesses as more imported products began coming into the New Zealand market.
Acting Executive Director, Anna Heyward, explains that the focus and purpose of the campaign has changed over the years.
“We’ve evolved a lot in the last 30 years. Our main goal now is on providing a trusted and accountable brand for our licensees that helps them promote their New Zealand products and helps people identify them.
“So that will be our focus going forward, just being really positive and creating a good brand for NZ made businesses.”
For businesses looking to work with Buy NZ Made, Anna Heyward stresses that they are here to support NZ manufacturers with all of the information and resources this longstanding campaign has to offer.
“Our brand is an accountable and trusted one that’s been around for decades. We do a lot to promote our licensees at trade shows and on social media and they all have access to the branding, artwork, stickers and swing tags of the logo to help them label their products. We also help them understand the requirements of that labelling to make sure they are compliant.