Woolworths on Saturday criticised a move by the department of Trade and Industry (DTI) to impose a quota on the number of Chinese clothing and textile exports to South Africa.

The two-year restriction will begin on September 28, said Woolworths chief executive Simon Susman.

"Woolworths is of the view that the implementation of this quota will have a further significant inflationary impact on the price of clothing which is already subject to a 40 percent tariff barrier."

He said the restrictions would impact customers who would have to pay a higher price "particularly in sensitive areas like children's clothing which could go up by 20 to 25 percent".

"Shelves will be empty over the holiday season, and ultimately there will be damage to South Africa's textile industry... It is a lose-lose situation."

Woolworths and others in the clothing industry were notified by the DTI on Friday of its intention to impose the quotas.

Susman said retailers had been given seven days to respond to the proposal, which was drafted without prior consultation with retailers and parties concerned.

Said Susman: "We believe that had the DTI been able to set aside time to do a full impact study, they (would be able to avoid) this ill-advised measure."

He added that the quota would result in the loss of jobs within the South African retail industry as orders placed would be unable to be fulfilled by a South African counterpart "at anything close to imported prices".

Retailers were also known to place orders close to a year in advance and the restrictions would disrupt those orders and cause an expense for a product South African retailers may not be able to sell.

This would lead to reduced stock in shops during times of highest demand — during the South African holiday period, Susman said.

"The consequent drop in revenue to the fiscus and confusion at the ports of entry cannot be in the country's interest."

The country's clothing industry would also be affected by quotas on fabrics sold to the local industry, which needed to provide the modern merchandise customers require.

"Woolworths is concerned that replacing the blocked product locally will be a struggle. Much of the skills and technology are not available in South Africa, and, if they are, will come at significantly higher prices for customers.

"In addition to the potential loss of jobs in retail, a thriving industry of South African workers who process, ship and transport legitimate imports from China will be laid off. These quotas do not in any way address the real issue of illegal imports from China."

Woolworths made an appeal for the DTI to consult with retailers on the restrictions. "We will in the meantime be working with Clotrade, Texfed and our competitors to develop an action plan around this."

The DTI could not immediately be reached for comment.

Sapa

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