Trade Information - British Footwear Association Newsletter


Good News from the Footwear Industry

150 delegates from the full spectrum of the British footwear industry attended a very upbeat and confident conference at the Diamond Conference Centre (home of Rushden Diamonds football team) on 11 November.

The theme was the opportunities available to the industry and there was a wide range of speakers and activities with a hands-on e-commerce session and an exhibition of varied suppliers to the industry. High profile speakers included:

Sir David Wright, Chief Executive of British Trade International, who spoke about the Government's plans to strengthen further its support for exporters in general and the footwear industry in particular (which already exports over 50% of UK production at almost £600 million pa).

• Dr Ron Whittaker, Chief Executive of SATRA, who spoke about the dynamic changes in the international footwear business and the way British firms will need to adapt to face them.
  
  
• David Jones, Chief Executive of Next, who threw down a lively challenge to any British footwear manufacturers interested in supplying his firm. He spelled out in detail the steps they will need to follow. BFA will be encouraging its members to rise to the challenge and KFAT and the Regional Supply Office will also be making sure the industry seizes this opportunity.

The exhibition ranged from computer-aided design to credit insurance, from training to components to financial information systems.

There was a display of some of the best of British footwear, showing what very diverse of types and styles of shoes are produced in the UK, and exported from it.

Seminars were held about developments in training in the footwear industry and about the latest regulations in employment law, labelling, packaging and consumer safety.

The seminar about training was led by Charles Hubbard of FLNTO. He will be very pleased to have comments on training issues - tel 01604 811999, fax 01604 812218 or email nfto@easynet.co.uk.

The seminar on regulations ran out of time (too many regulations!) but Denis Bowen will be happy to discuss his slides covering new laws on environmental, consumer and trade issues. Telephone 0207 580 8687, fax 0207 580 8696 or email bfa@easynet.co.uk

Ken Anthony began to speak about recent developments in employment law and he will be very pleased to answer any questions about the new provisions of the Employment Relations Act which comes into force on 15 December. Tel: 01536 484745 or fax 01536 483861.

A copy of the latest version of the footwear industry action plan is available now from BFA (tel 0207 580 8687) and a fuller report on the conference will be available shortly.

Shoe repairers get chance of reduced VAT rate

Following pressure from governments in the Low Countries, the European Council's finance ministers agreed on October 8th to allow countries to apply reduced rate VAT charges to small scale labour intensive services including shoe repairers.

Union governments can choose to apply the reduced rate if they believe that lower charges will lead to increased employment in the sector. VAT rates vary between countries, but in the UK VAT on domestic gas and electricity is an example of reduced rates. The UK Treasury is unlikely to take advantage of the concession on this occasion but the episode offers interesting parallels for other areas of VAT policy towards footwear.

BFA has begun to launch new services to members covering the areas of preparations for Employment Tribunals and Health and Safety audits. The new services build on the practical experience in human resources management of our Head of Industrial Relations, Ken Anthony.

The employment tribunal support service is a timely development given the recent 140% rise in compensation limits for unfair dismissal to £50,000. The service will:

• complete all documentation in connection with the Tribunal, ie the employer's response
  
• give advice on how the case should be handled
  
• facilitate meetings with the Advisory Conciliation and Arbitration Service
  
• advise whether a compromise agreement should be sought and what level of settlement should be considered

The health and safety review is a system of on-site visits and help with recommendations for complying with the law. As well as initial feedback, a written report of recommendations will provide a tailor-made action plan for the company. Further six month reviews to check progress can be ordered.

Both develop existing BFA advice which is industry general into a more company specific service. Both services are initially free to members with a small charge incurred for heavy use of the service. Advantages of using the service include benefiting from Ken Anthony's experience and BFA's links with regulatory bodies and stakeholders in the industry. Please call Ken Anthony on 01536 484745 to find out how your company can make the most of membership.

The Government is proposing to introduce a new tax from April 2001 on energy use by industry. Designed to promote energy efficiency, the main impact for footwear companies will be:

• a levy of 0.15p per kilowatt hour on electricity and gas
  
• a reduction in employers' national insurance contributions of 0.3%

Information on the kilowatt/hour charge should appear on your electricity and gas bills, enabling you to work out the likely impact on your company. Service companies and less mechanised manufacturers might enjoy a small net gain from the reduction in NI.

The impact of the levy has already been much reduced following lobbying by heavy industry, but BFA is aware that the footwear manufacturing industry is in no state to bear extra costs and invites members facing cost rises to contact us to consider a collective approach to Government.

Retailers to prove no fault on returns

A new EU Directive on the Sale of Consumer Goods and Associated Guarantees is required to become UK law no later than January 2002. Many provisions are already a feature of UK law, but a new twist will see retailers required to prove that goods they sold to consumers were without fault at the time of delivery.

This new requirement relieves consumers of the burden of proof, and will only apply for six months after delivery. Retailers are concerned that they will be responsible for advertising claims made by suppliers, and may seek to improve returns clauses in their contracts with suppliers. Laws governing sales between suppliers and retailers are unaffected by the Directive.

The Footwear Code of Practice, a voluntary agreement sponsored by the Footwear Distributors Federation with approval from the Office of Fair Trading, at the moment has an independent testing facility provided by SATRA. Fees are split between retailers and customers, with the latter receiving a refund in the event they are proved correct. Sponsorship of the Code is under discussion with the Independent Footwear Retailers Association, who may choose to sponsor it themselves.

The poor effect on customer loyalty of disputed returns is recognised in a new initiative from Denmark. Retailers and manufacturers/suppliers have agreed a detailed protocol of actions designed to help shop assistants provide an instant fair response to dissatisfied customers. Any dispute then takes place off-line between retailer and supplier. A copy of the Danish protocol is available from Denis Bowen at BFA on 0207 580 8687.

E-commerce with component suppliers

With support from the EU funded Footprint project, a pilot website for order tracking between footwear manufacturers and component and leather suppliers has been created to encourage firms to think about the benefits and implications of electronic commerce further up the supply chain.

The website and accompanying database structure has been developed by ABS Software Ltd, and follows a meeting in the summer with representatives of manufacturers and suppliers.

Details of the site will soon be sent to members for evaluation. BFA hopes that a positive response from members will lead to an application for more funding to help expand the site from order tracking into other areas such as ordering and inventory planning.

DTI has funds available for employees from any discipline in companies employing less than 2,000 employees to spend between 3 and 12 months in a placement with an overseas company. The objective is to help them learn best practice, improve productivity and develop overseas links.

This could help fund the costs of sending personnel for a placement with overseas upper suppliers, or perhaps for a placement with an overseas distributor or agent. Further details available from Karen Hopwood at DTI on 0171 215 3891 - ask for the International Secondments brochure.

Trade developments in Vietnam and Mexico

The European Commission is set to introduce a double licensing system for footwear imports from Vietnam. The procedure is designed to stop Chinese footwear from claiming Vietnamese origin and benefiting from GSP tariff discounts and avoid quotas and dumping duties. The system is supposed to start from 1st January 2000, which is not an auspicious date to start a new computer system!

The EU Commission has also negotiated a free trade agreement with Mexico, which will see tariffs fall from the current 30% level on UK footwear exports. However, the Commission has been persuaded to compromise with the Mexicans on rules of origin to benefit from the preferential tariff rate. Mexican rules preclude the use of imported uppers, where as European rules and World Customs Organisation non-preferential rules do not. The deal is said to include a quota for EU exports made under EU origin rules, with the rest following Mexican rules. BFA is very concerned that the Commission should partially accept the Mexican system, and that a burdensome quota system for UK exports should be introduced under the guise of a "free" trade agreement. There is still a chance that the Council of EU Member States will reject the compromise and instruct the Commission to renegotiate, and BFA has written to the Trade Minister, Richard Caborn, to seek his support. More information from Denis Bowen on 0207 580 8687.

This shoe industry information is kindly supplied by the British Footwear Association.
For further details, please contact:

British Footwear Association 3 Burystead Place Wellingborough Northants NN8 1AH United Kingdom tel: 44 (0)1933 229005 fax: 44 (0)1933 225009 email: bfa@easynet.co.uk