Australian Made boss says offshoring is avoidable as more firms turn to China

Australian Made, Australia Grown Campaign (AMAG) chief executive Ian Harrison has called on local consumers to think seriously about the implications of their purchasing choices after Australia’s biggest department store, Myer, announced it would be doubling its outsourcing to China.

“It’s vital that now, more than ever, shoppers think long and hard about the broader implications of their choices each time they buy something,” Harrison told Manufacturers’ Monthly.

“The rising Australian dollar is putting enormous pressure on Australian manufacturers and growers. Businesses need to review and restructure their practices in order to remain competitive against cheaper, imported products and in export markets.”

Myer announced yesterday it would be doubling its outsourcing of homewares and fashion products from China to $200 million a year by 2016.

Myer chief executive, Bernie Brookes, told Theage.com.au’s Business Day reporter, Eli Greenblat, that the department store has already administered $70 million in outsourcing from China, including a $50 million, five-year contract with the world’s largest manufacturing-outsourcing company, Li & Fung, which is set to expire in August.

Interestingly, Myer’s decision comes despite rising production costs in China. According to Brookes, conditions for factory workers in China have been increasing steadily, with new laws stipulating 44-hour weeks, and requiring employers to pay overtime and increased Sunday rates.

For AMAG’s Harrison, consumer spending habits are a big part of the problem. Myer’s doubling its China outsourcing is due to the extreme popularity of its exclusive brands, which are predominantly made in China.

“As we know only too well, moving production offshore results in the loss of jobs and opportunities for valuable skills training for our young people,” Harrison told MM.

“The Federal Government has an important role in getting the macro policy settings right – and this includes Australia not leading the charge on introducing a carbon tax – but the decision lies with everyday Australians to make the right choice too.

“I am strongly encouraging everyone to put their preference into practice by buying Australian and re-investing in our community."

 

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