Listed South African retailer Woolworths on Friday expressed its disappointment at the stance taken by the Congress of South African Trade Unions (Cosatu) — including the South Africa Clothing and Textile Workers’ Union — on the ongoing dispute over locally produced goods versus imports.
On Wednesday, Cosatu threatened mass action against South African retailers after the Competition Commission found that there would be no competition concerns should retailers sign the proposed Code of Conduct tabled by the union at the National Development Labour Council (Nedlac).
The code provides for clothing stores to set a target of 75% local content for clothing products on their shelves.
Woolworths CEO Simon Susman said the possible strike action heralded by Cosatu can only damage an industry that Woolworths is committed to helping.
“Across the board, over 80% of Woolworths goods are locally produced with, [at present], over three-quarters of our clothing being made in South Africa,” Susman said.
“We believe that shows Woolworths commitment to the local clothing industry, as do our continuing efforts to help improve technology and training in the sector. Woolworths recognises that the textile and clothing industry is facing a crisis and we are doing our best to help avert that crisis.
“We believe that strike action will only make matters worse and that the solution lies in discussions between government, manufacturers, labour and retailers.”
He added that Woolworths is one of a group of retailers — which also includes Truworths, Edcon, Pick ‘n Pay and Foschini — that has undertaken to help local manufacturing thrive and that has jointly set up a Section 21 company dedicated to working with the local industry to make it more efficient and competitive.
There is particular concern among the unions over the importing of lower-cost Chinese goods into the market.
The unions are demanding that a quota system be put in place that would require all major retailers to undertake to sell a certain percentage of locally produced clothing.
“Woolworths already buys locally as much as we can and, in fact, the amount of goods purchased locally by the group as a whole increased last year,” said Susman.
“It benefits us, as it frees us from the effects of currency fluctuations, gives us shorter lead times and lowers transportation costs. However, one of our fundamental goals, in line with government policy, is to be part of a strong South African economy that is genuinely competitive worldwide.
“This requires long-term thinking. Any kind of quota system is pure short-termism and would be totally counterproductive. Our focus as retailers has been to curb illegal imports and to stop dumping. If we are successful, this will be far more beneficial to local manufacturers than quotas.”
Woolworths said together with all major retailers involved in the negotiations, it will continue with its efforts in helping local manufacturers address the key challenges they face in an increasingly competitive environment. — I-Net Bridge