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The companies - Edcon, Foschini, Mr Price, Truworths, Woolworths and unlisted Pepkor - say that besides an expected 20% to 25% jump in clothing prices and shortages in the run-up to the busy Christmas period, the fiscus "could lose over R1bn [in taxes] from the top retailers alone through lower profits, lost sales and lower VAT collections by December 2006, as many products cannot be replaced in such a short time".
They say local companies would not be able to fill the supply deficit that the quotas would create.
The retailers say they would already have been procuring most items acceptable to consumers locally if there were "sufficient capacity and diversity in the local manufacturing industry", therefore avoiding the 40% customs duty and 10% to 15% shipping and insurance costs on imports.
Retailers to meet with department of trade and industry
"These costs are already been borne by the millions of consumers on all imported clothing."
They say it is ironic that "if duties were to be reduced to around 20% (which is closer to the norm internationally) from the current 40%, many clothing prices in South Africa could actually fall by about 10% or more".
The retailers want a task force of independent professionals to be appointed urgently "to talk to all parties and compile an impact study of the consequences to the SA economy for review by the government of these regulations before taking them any further."
The proposed regulations were first published in Government Gazette 29 186 on Friday 1 September, come into effect on Thursday 28 September and will remain in effect until 31 December 2008.
A spokesperson for Woolworths told fin24 that retailers have been invited to meet with the department of trade and industry on Thursday.
'Severe short-term problems'
Representatives from labour and the clothing-manufacturing sector will also be present. Parties were given seven days to respond to this proposal, which was constructed without consulting with retailers, said Woolworths.
The quotas would result in across-the-board increases in clothes items, with the "only significant exclusions being T-shirts, knitwear, shoes and accessories".
The retailers reckon up to 60% of their customers' favourite fabrics that are not readily available in South Africa will be restricted by the quota, "endangering even further the likelihood of satisfying consumer demand and imperilling jobs in the cut, make and trim manufacturing industry".
They continue: "The local fabric industry can be as much as 50% more expensive, is far less flexible and many fabrics on the list are simply not readily accessible to South African retailers locally, if at all."
This in turn would jeopardise the very industry the regulations are meant to protect, as some factories could face "severe short-term problems which could threaten their viability before the end of the year".
'Many legal importers providing an excellent service'
The companies argue that retail profit growth has resulted in "tens of thousands of jobs" being created directly in retail, and indirectly in the logistics, IT and transport sectors, and that these could be impacted upon negatively.
The benefits of cheaper imports have been passed on to the consumer, "as evidenced by low and negative inflation in many clothing articles sold in stores", they say.
"The retailers believe that the battle against the massive amount of illegal or under-invoiced garments to South Africa is being addressed in the wrong manner by focusing on control of the recognised and ethical companies through quotas, instead of waging a valid battle against illegal imports.
"There are many legal importers providing an excellent service to South African consumers by sourcing demanded items at best prices from around the world.
"However, the retailers believe that quotas will inevitably lead to corruption and the creation of undeserving wealth by some middlemen."
