Clothing company hurt by competition from Dominican Republic
The head of one local clothing company here has complained that cheaper goods from the Dominican Republic are hurting his business, forcing him to take drastic action in order to remain afloat.
Managing Director of River Bay Trading Ian Pickup said the importation of t-shirts from Santo Domingo made it difficult for him to compete, and, as a result, he had to lay off some of his 40 employees for periods of “up to four weeks in some cases”, in order to remain in business.
Pickup said between October 2013 and August 2014, the company experienced a 19.5 per cent decline in adult t-shirt sales and a 20 per cent drop in the sale of children’s t-shirt.
“It has resulted in temporary layoffs. It has made [the t-shirt aspect of] our business much more seasonal. We have lost a large amount of t-shirt business and what we have done is in fact, reduce the size and the weight of our t-shirt in order to make us more competitive with those [imported] shirts,” said Pickup.
The River Bay Trading boss said other areas of his clothing business were subsidizing the t-shirt segment, placing a dent in profit margins because “t-shirt was by far” the largest part of sales.
Almost a year ago, Pickup raised concerns that his company was under threat by cheaper Domincan imports flooding the market. He also called on the Government to investigate claims that some clothing entered the island with fraudulent labels.
At the end of August 2014, following a tour of his Wildey, St Michael company, Pickup said “the problem with the Dominican Republic imports is the duty under the CARICOM/Dominican Republic Free Trade Agreement. So they are able to enter and sell their shirts at about 30 to 40 per cent lower than our regular price”.
Minister of Industry, International Business, Commerce and Small Business Development Donville Inniss gave the assurance at the time that investigations would be carried out into both claims.
However, Pickup, who described the importation issue as “despicable”, told Barbados TODAY he had not heard from Inniss since, and there had been no noticeable change to the situation.
“As I understand it, the Barbados Government is satisfied [with] the shirts originating in the Dominican Republic; and even though the labeling certainly doesn’t meet Barbados standards they are allowing the shirts to enter the country,” Pickup claimed.
However, in an interview with Barbados TODAY, Inniss gave the assurance that every complaint was investigated.
The minister pointed out that in recent times the Barbados National Standard Institute (BNSI) had turned back some goods because they did not meet local standards.
“I am not aware of any complaints that remain to be investigated. However, I will ask my staff to let me know if any queries remain outstanding,” said Inniss.
Meanwhile, Pickup has embraced suggestions for a boycott “on moral grounds”, but he believed it was up to the Caribbean Community to take “some action” against Santo Domingo.
“I don’t want to be specific about what that action should be. It is not up to me to make people boycott goods, but it is up to me to say I don’t think what they are doing is right,” Pickup told Barbados TODAY.
But Inniss said a boycott was not as easy as it sounded, pointing out that it could lead to a backlash against Barbadian products.
The minister added that there was little Barbados could do to limit imports because of trade agreements currently in place.
“There is no question of protectionism because of the free trade treaties we have signed on to. We can’t ban. Only in circumstances we can turn back business when they do not meet our health and environmental standards. The BNSI had turned back goods because of [poor] standards,” said Inniss.
He promised that Government would continue to work with t-shirt manufacturers to help them concentrate on export.