Branded in Britain

UK manufacturing: Still feeling the pinch

By Myles Neligan BBC News Online business reporter

UK manufacturers are hoping to revive their flagging fortunes by appealing to shoppers' patriotic instincts.

A consortium of household goods and DIY equipment makers with annual sales of over £3bn has launched the "British Made for Quality" hallmark, a label that organisers hope will encourage consumers to buy British.

BMFQ says the label, which is due to start appearing in stores this summer, will guide shoppers wishing to buy British-made goods in preference to "poor quality, often unsafe" imports from Eastern Europe and Asia.

"This scheme fills a vacuum," said BMFQ's Andy Smith.

Tough times

Certainly, any scheme that manages to boost sales would be warmly welcomed by manufacturers.

[Labelling] becomes a non-issue if we make products that people want to buy

Matthew Fell, CBI

Although the latest surveys suggest that a year-long contraction in industry may now be bottoming out, manufacturers still have little reason to be optimistic.

The sector has been hit by a slump in export demand due to a combination of the euro's weakness against the pound and the global economic slowdown, forcing factories to lay off thousands of workers last year.

Last month, official statistics showed that UK manufacturing output shrank by 6.4% during the year to December, the steepest decline in a decade.

Vacuum cleaner tycoon James Dyson's recent decision to shift most of his manufacturing operations overseas, followed quickly by the closure of Ford's 70-year-old Dagenham plant, set the seal on a grim 12 months for British industry.

EU pitfalls

Against this gloomy backdrop, BMFQ's appeal to consumer patriotism may well encourage some shoppers to channel more of their famed spending power towards British-made goods.

But the effectiveness of schemes of this kind is unproven, and in today's world of unfettered trade flows, their implementation is often beset with legal difficulties.

The NFU's red tractor logo: No discrimination on grounds of origin

National certification schemes face a serious obstacle in the form of European Union legislation banning all marketing initiatives which might discriminate against imports from other EU countries on account of their origin.

The National Farmers' Union red tractor logo, one of the best known consumer labels in the UK, got the green light from the EU authorities only after the NFU agreed that the logo would be used to identify food produced according to British standards, rather than of British origin.

This means that foreign food producers would be eligible for certification under the red tractor scheme if they felt that using the logo would boost their sales in the UK.

The BMFQ says it is confident that its labelling scheme complies with EU law, and will not face any awkward legal challenges from Brussels.

"I'd like to see them try," said Mr Smith.

Confusion

Launching new consumer logos is also made more difficult by the sheer number of existing certification schemes, which can often leave shoppers feeling confused.

The BMFQ logo would appear alongside logos such as the British Standards Institution's famous kite mark, a label which certifies that products have been manufactured according to a set of internationally recognised quality control criteria.

The BSI kite mark is available to all firms which meet the institution's criteria, irrespective of their national origin.

Many consumer products also bear labels certifying their EU origin, along with a plethora of industry-specific logos and labels.

Analysts say that building brand recognition by maintaining consistently high standards remains the best way of winning over consumers.

Consumers backed Britain in 1968

"[Labelling] becomes a non-issue if we make goods that people want to buy," said Matthew Fell of the Confederation of British Industry's manufacturing council.

Some argue that a simple appeal to patriotism may have little effect on sophisticated and cost-conscious consumers well used to operating in a globalised economy.

Patchy progress

The most high-profile campaign to steer consumers towards British-made goods was launched in 1968 by former Prime Minister Harold Wilson under the slogan "I'm Backing Britain."

The campaign was designed to give British industry an added boost at a time when a sharp devaluation of the pound was already buoying overseas demand for goods produced in the UK.

Mr Wilson's promotional push was helped by a nationwide publicity campaign, but did not include a labelling scheme. The campaign lost some of its momentum when it was discovered that a batch of T-shirts bearing the "I'm Backing Britain" slogan had been made in Portugal.

Since then, the government has made half a dozen further attempts at introducing "made in Britain" consumer labels, but none have got off the ground.