New Zealand exporters at serious risk from counterfeit havens

Thursday 1st May 2008

The strength of New Zealand brands will assist the New Zealand apparel industry to avoid the risk of being squeezed out of the market by an influx of cheap imported clothing.

New Zealand is recognised internationally for its sporting, adventurous, outdoors identity, and the clothing going with it. This country is also rapidly gaining recognition as an origin of high fashion. It is the strength of the brands and innovation of the material and product, which carries New Zealand’s reputation at home and abroad.

New Zealand apparel industry

Traditionally, New Zealand has been a market almost in isolation - approaching merchandising as a self-sufficient entity, making, designing and selling its own products and enhancing its reputation at home and abroad as made in New Zealand.
The government proposal to cut tariffs on imported clothing sits as a Damocles’ sword over our apparel industry. On the one hand, New Zealanders will have a wider choice and cheaper clothes. On the other, the New Zealand apparel industry runs the risk of being squeezed out of the market by an influx of cheap imported clothing. As the availability of low-cost clothing increases, New Zealand merchandisers will find it increasingly difficult to compete at the lower end of the market.
Partly under the influence of increased migration, increasingly, New Zealanders are demanding value for money, quality and internationally recognised brands. Changing focus from affordability to New Zealand quality should allow the New Zealand merchandiser to survive increasing import competition. By building goodwill through its brands, the New Zealand clothing industry can thrive.
How should New Zealand industry future-proof itself? How might the New Zealand apparel industry hedge against the increased level of imports likely to follow tariff reduction?

Branding and brand protection

New Zealand based manufacturers can protect their unique market position by exploiting New Zealand’s clean, green image as a point of difference. Increasingly, the brands and goodwill of New Zealand merchandisers will be the basis on which people who value quality can make their purchasing choices. By increasingly emphasising brands and their reputation, New Zealand merchandisers can increase their impact on the world stage and survive the invasion of overseas imports.
A prime example of the way forward through branding can be seen in the expansion and exposure of Specialty Brands through its brands Logan and Rodd & Gunn. Established in 1987, Speciality Brands quickly developed a reputation for quality clothing design and manufacture. It expanded throughout the world, its reputation protected by its valuable brands.
To put in place intellectual property protection, the first step is to look to New Zealand. First, identify the areas of operation, and special products and services. Next, identify the brands and logos synonymous with the business’s reputation in the market place. Then prevent other traders operating under similar brands and logos.
These core areas should be protected by filing for registration of the brands and logos as trade marks. Registered trade marks can prevent importation of competing products under the same or similar brand. A registered brand will form the base for establishing goodwill and provide foundations on which to build.

Looking abroad

The second step is to look abroad. Where are the exports going now and where are they going in the future? Which countries might seek to rip-off the brands? Can the commercial risk be borne without the benefit of the protection of registered rights?
Trade mark registrations are jurisdiction-specific. This means that the protection under a New Zealand trade mark registration ends in New Zealand. If the countries one exports to are havens for counterfeiters, there is a risk.
After a trade mark application is filed in New Zealand there is a six month window in which to determine priorities in other markets, as the New Zealand application provides the base date for any overseas applications.
Cutting tariffs is not without opportunities for manufacturers. Some may be able to source new materials, cheaper manufacturing options and large-scale product facilities, thus enabling them to expand market focus. Enterprising manufacturers who position themselves well should be able to survive the reduction in tariffs.
This article was also published in The Independent, 23 October 2003

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