Complaints to the Board of Tariffs and Trade, may have fallen on deaf ears.
THE RATHER tattered fortunes of the up-market, designer-label clothing importers - hammered by a major import duty increase in mid-December (See FTW. February 14, 1997 issue) - don't look as though they are likely to be stitched back up, if information released to FTW is correct.
Faced with tariff increases that - because of the change in the ad valorem/weight formula for new duty imposition - broke the 500+% levels in certain products, some of these importers are finding their already expensive goods being priced-out of the market.
Complaints to the Board of Tariffs and Trade, and appeals for the new duties to be reconsidered, may have fallen on deaf ears, if the information released to FTW is correctly interpreted.
According to the board's Mrs Van der Merwe - who correlated input and output to-and-from the board committee investigating the written complaints - the meeting on the subject has taken place.
A decision has been taken, she said, and each of those who have contacted us in writing are being replied to.
As to the contents of the reply, FTW was told that this was for the complainants' ears only. But, Van der Merwe added, if you write something in a letter to us, we can consider replying. Pushed further on whether some form of ameliorating action was being taken, Van der Merwe replied: They (the board) have looked at it, and we've explained all the reasons for it (the new tariff structure). None of which suggests that the board has taken a sympathetic view to the complaints, nor that any change to the new tariff formula, or duty refund, is being considered.
Meantime, everyone in the trade who is now receiving goods ordered last year for the forthcoming winter season in SA has cold sweats, according to Nico Botha, of high-quality men's outfitters, Bon Ami.
Some of the importers who have just landed goods have had heart attacks, he said. Shirts, for example, that last year cost R500 are now costing R800. It's the kind of thing that puts the small man (without big financial backing behind him) out of business. A lot of them are just not strong enough to take this. The bigger players in the market are also disturbed by the duty increase.
According to Faizel Surtee, a partner in Regent Trading - one of the biggest in the country's truly up-market clothing retail industry - the change from the old tariff calculation of 30% duty, plus 15% surcharge (equals 45% total) to the new ad valorem/weight formula, is disastrous.
Surtee points to typical imports of designer-label suits - previously retailing at about the R4 000 level - now being priced up above the R5 000 mark.
I don't think they (the Board) gave this any thought, he said. At the lower end, there would be a reduction in duty (under the new tariff calculation) but, at the top-end, a large rise is evident. In a market which is very conscious of comparative pricing internationally, Surtee sees his company losing a lot of its most valuable customers. We have a big following from the African states, with a lot of big-value buyers, he said. They used to buy direct from Europe, but changed to SA when we proved to be more cost-competitive.
But now, we've lost our competitive edge, and I think we'll also lose these customers. If, as FTW has surmised, the letter from the board to these complainants does no more than detail how the new tariff structure is formulated, where next? There is no umbrella body for this section of the clothing retail industry, and - if their initial complaints come to nought - putting further pressure on the board to reconsider its new scale of duties looks a forlorn procedure for the individuals concerned.
However, there may be some help to come from the forwarders' body SAAFF (SA Association of Freight Forwarders).
Roland Raath, m.d. of forwarder Cargocare - which has a number of these clothing importers in its clearing books - has written to SAAFF complaining about the adverse effects of the new tariff on the forwarder's business.
A lot of these importers, feeling the pinch at the new duty levels, will be cutting back drastically on their orders for next summer's collections, he told FTW. For the forwarders who specialise in up-market clothing imports (and we are only one of a number), their business will also be cut. While Raath has sent his letter, this had not been received and tabled for discussion at time of going to print.
