Buyers beware
By David MacGregor,
The debate over the use of the New Zealand Made symbol and the buy New Zealand Made campaign to promote domestic consumption of domestically produced goods seems as pointless as the campaign itself.
Why buy New Zealand made? Does it matter where products are assembled? Can you honestly say you would buy an inferior product on the grounds that it was made in a kiwi factory?
Can all goods be regarded as of the same value because of their point of origin – a generic standard–does it follow that something is well made because it is kiwi made? Some consumers may buy a New Zealand made product versus an international substitute as their ‘default’ but, arguably, only if the quality (design, materials, assembly, brand-fit etc…) are satisfactory. But the majority of consumers are more concerned with the way the product solves their problem – including cost-effectiveness. It is a basic economic imperative.
The flood of imported goods has changed New Zealand’s buying behaviour dramatically since the liberalization of imports and the end of the corrupt import licensing system of the Muldoon era (which allowed the few to exploit demand for internationally sourced products by, effectively granting government sanctioned monopolies). Our exposure to the world’s products has raised expectations; not only for quality, but also that we will enjoy ‘a bargain’, which accounts for the rampant success of The Warehouse.
Marketing companies like Icebreaker source their raw material; fine Merino wool, from farms in the South Island. They design their products here and all of the high value roles in the organization are based here. The ‘assembly’ of garments is sourced offshore. Not necessarily because of cost, but because the technology, systems and skills of workers in China, India and other countries in the emerging world are more reliable and able to manage the volumes required to fill international demands.
Pumpkin Patch manufactures its garments for the world in China then brings them back to New Zealand for redistribution to retail stores in Australia, Britain. Pumpkin Patch has enjoyed rapid growth, growing from about $2million to over $20million(est.) turnover in just a few years. Manufacturing in New Zealand would simply not be viable.
On its website Buy New Zealand Made suggests that A C Nielsen research showed that 75% of New Zealanders prefer to buy products that are made in New Zealand. Preference and intention to act don’t always translate into actual behaviour. I suggest that on an emotional subject like nationalism it is psychically easier to default to a good intention-which makes the result possibly meaningless.
There are some products that ‘should’ be made in New Zealand. No matter how talented Balinese carvers might be I wouldn’t want to see Maori designs being made anywhere but here. The same is true of any product that demands highly skilled workers to produce an item where the making is in fact the product or significantly differentiates the product. Anyone with some training could produce art glass as they do in Murano, Italy. But it wouldn’t be Murano glass. Artisan products have a high intrinsic value. Machine manufactured products, typically, do not. In the case of artisan products like wine I personally prefer New Zealand made products because they are often very good (better than alternatives) and well priced.
In a way this conversation opens Pandora’s box. What ‘should’ or ‘shouldn’t’ be made smacks of central planning. Hopefully those days are behind us now. In a world of vast consumer choices it is naïve to imagine that people will make choices on the basis of patriotism alone - any more than business people will make decisions about where goods are assembled if the costs don’t have companion benefits.
I am not arguing that one should not buy New Zealand made goods. On the contrary, if they are good then all’s well and good. But to suggest that only New Zealand made is good is ridiculous and counter-productive (as evidenced by companies like Icebreaker, NZ-O mountain bike wear and Pumpkin Patch, all of whom bring profits home to New Zealand and who add the value here from design and marketing).
Buyers beware. Patriotism is, after all, the last refuge of scoundrels.
Comments
Chris
I agree with you David. Does it not also seem strange that a Government that has been applauding Icebreaker through channels like NZTE and Better By Design, is now by inference telling us we should buy only Swazi or Norsewear? I would also suggest that it is incongruent with their wish for a knowledge economy. Surely what Icebreaker is doing fits a description of a knowledge based company.
ivan
David, I think you are missing the point when you talk about Buy Kiwi Made as being a campaign about people making \"choices on the basis of patriotism alone\" Buy Kiwi Made actually has nothing to do with patriotism. What it is about is ecological sustainability and social justice.
It is an unsustainable use of a finite natural resource to waste a depleting and increasingly costly natural resource - oil - shipping goods half way round the world to sell in New Zealand when a product of equivalent quality can be manufactured in New Zealand.
New Zealand has a current account deficit of $14.5 billion, or 9.3% of GDP, and predicted to increase. This largely financed through foreign investment. The economic impact of this is likely to be higher interest rates and exposure to inflation, and property prices increasingly putting home ownership out of the reach of average New Zealanders.
Thirdly, many imported consumer goods are made in sweatshops, in countries overseas that have minimal or no enforced labour standards. By buying Kiwi Made, consumers can ensure thay are not contributing to the profiteering of overseas enterprises at the expense of their impoverished workers.
Matt
Yikes — if that\'s the point, I\'m pleased David missed it.
Saving oil? The farmers of Europe will be delighted to hear that we\'ve decided to stop sending them our butter and lamb. Their meat- and cheese-eating citizens might not be so pleased, of course. Our farmers, who have been happily producing New Zealand-made for generations, would be apoplectic. And I\'m not sure I want the nation covered in new factories to produce these home-grown products. (\"Equivalent quality\" — yeah, right. At what cost?)
Current account deficit? In New Zealand, where producing many things is a financial or physical impossibility — we\'ll never have a microchip factory or a large truck plant here, for example — we need to export to make up the shortfall. Spending our money on producing goods here that can be made more cheaply elsewhere doesn\'t help our foreign account deficit, it just makes us more inefficient. Idealog has a real solution to our current account deficit: the creation, development and export of ideas.
The sweatshop argument is completely bogus. You\'d avoid buying foreign goods in case they are made in a sweeatshop? That suggests your social conscience would prevent you buying goods from the developing world specifically. Nice one. Sweatshops are a genuine problem, and the best way to tackle it in the short-term is a mixture of consumer pressure and government vigilance. The best way to tackle it in the long term is in social reform in the developing world, but that is less likely to happen without trade opportunities.
And, of course, sweatshops aren\'t a uniquely foreign phenomenon. We had them here once and some say we still do:
<a href="http://idealog.co.nz/content/view/145/61/" title="The wild ride">The wild ride</a>
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