The Value of the Label "Made In"

European Original - straight from Asia

Nowadays you can buy a luxurious handbag that next to the name of the brand has "Made in Italy", although all parts of the handbag have been produced in other countries, and then have only been made up and shaped in Italy. The result is a lower cost of the production for the company, the same price for a consumer, fewer jobs in European countries and therefore less paid tax. Countries such as Italy and France are particularly affected by this phenomenon


By NENAD ĆIRIĆ (nenad.ciric@wavemagazine.net)
from Milano, ITALY
Translation: SANDRA IVANOVIĆ


Within a modern consumer society nowadays there are many factors that a company must reckon on in order to succeed in marketing its product in the right way. The demand at the global market is variable and consumers are the ones who dictate the rules. Or at least it should be so.

It is believed that the first form of advertising was the one practised in ancient times by traders at the markets. They shouted to communicate with people gathered in order to describe the qualities of their products. Then the word "brand" did not exist. The origin of products itself was associated with the quality. The seller, who was also the producer, guaranteed the quality.

A Company from One, and the Product from Other Continent

Nowadays in the 21st century, the place of production and the headquarters of manufacturers have somehow managed to separate. So there is a paradox that a European brand offers a product that comes from a factory in an Asian country. In that way companies manage to save huge amounts of money by using cheap labour. In time consumers have accepted this kind of production realising that in that way they get the possibility of buying the same items at cut prices. But eventually the situation has begun to complicate. The news of the first cases of the abuse of workers in Asian countries has begun to reach the consumers in the West. Cases that have churned up the world's public most are certainly reports related to the abuse of children in factories.

Another problem that is observed is the constant reducing of the number of jobs in Western countries. More and more companies have moved their production towards the East and thus left many workers in Europe without their jobs. In order to regulate forthcoming problems, the European Union tried to establish quotas that would limit imports of products from developing countries. The most important document of this kind was "A Multi-Fiber Arrangement". However, on 1st January 2005 this policy was canceled and European market became unrestrictedly open to products from the East.

"Fast Fashion"

One of the industries that has used a new option - is the fashion industry. Guided by the idea of marketing products with low costs on the European market, companies have created a new kind of industry called "Fast Fashion". Inspired by the idea of "Fast Food", this new industry has developed mechanisms for rapid and cheap production in Asian countries. The best example is Spanish company "Inditex" that owns brands Zara, Bershka, Pull&Bear and is one of the largest fashion groups.

Of course, fashion companies are not the only ones that are found in the center of events, but what is interesting is the fact that exactly they insist most on the quality of their products that originate from traditional European crafts. Other branches have also followed this idea and thus the era of "low cost" in which we live in nowadays has come. The price of the final product has become the most important factor for both the manufacturer and the consumer. The quality is now in the background.

A Lower Price for a Company, the Same for a Consumer

As long as products have a clear declaration of origin on their label this is about a legal production and it is the choice of every individual what they will buy. However, many companies have got the idea of moving their production to one of the distant countries, while trying to cheat a consumer about the origin of a product. These are companies that did not want to reduce the cost of the final product, but only the cost of the production. These are brands whose products are a part of the category of luxury and whose quality, apart from the mark on the label itself, is guaranteed by a sign "Made In". The problem is that instead of "China", where the product has been created, it is often written "Italy" or "France" on the label.

One of the most interesting researches of the alleged origin of a product is the show "REPORT" of the Italian channel "RAI 3". This show from 2007 has shown that many "luxurious products" with the inscription "Made in Italy" have in fact originated from China. For example, nowadays you can buy a luxurious handbag that next to the name of the brand has "Made in Italy", although all parts of the handbag have been produced in other countries, and then have only been made up and shaped in Italy. The result is a lower cost of the production for the company, the same price for a consumer, fewer jobs in European countries and therefore less paid tax.

Countries such as Italy and France are particularly affected by this phenomenon. When a country that is a synonym for quality and luxurious products starts offering lower quality goods at the same price to its consumers the problem of the image of these companies, and also countries, appears. Therefore, governments of many European countries have decided to protect their "Made In" brands from abuse, and thus have established the rules under which a product can carry the name of a specific country of origin on the label. Namely, it is necessary that most of the production, i.e. more than 50%, is being carried out in the country that is listed in the declaration.

Corporate Social (Ir)responsibility

Not only the quality of the final product is a problem that appears along with the ignorance of the precise origin. One of the main reasons companies have decided to move the production to countries such as China is also the fact that these countries have not been members of international organisations for solving environmental problems until recently. Under the cover of the United Nations the "Kyoto Protocol" has been created and it precisely defines the rules on emissions of harmful gasses and general environmental protection. Some developing states such as China and India, although the signatories to the agreement, have no restrictions regarding the emissions. In this way, companies that operate in these countries are not subjects to penalties in case of exceeding the norms of this Protocol.

It is a big question - is it possible that most of the production will be back to European countries soon or the inhabitants of the Western hemisphere will still be only consumers? Certainly a dialogue with Asian countries, too, is necessary, so that the production in those countries would take place on previously defined rules. And maybe then the products labeled "Made in China" will be acceptable for all global consumers, and companies will not have to hide the origin of their products.


(Published: 11.11.2009.)