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Italian jewellers hampered by low-cost competition, unfair duties

By Tom Wildhern

VICENZA, January 25, 2009 - Italian jewellers have had a reputation for centuries for honing some of the highest quality and most exquisite designs in gold and silver jewellery.

But today they need to tackle head on the harsh reality of ever tougher competition from countries, such as India and China, with rapidly improving skills that can produce high-grade jewellery at a fraction

of the costs faced by the Italian sector, because labour costs in the developing world are so much lower.

And the Italians made the point at VicenzaOro First that they are handicapped by an unfair trade regime, where the system of import duties into their key markets, such as the United States, favour their main competitors.

The global economic crisis adds to the difficulties of the Italian export sector because many manufacturers are still waiting for the payment of invoices by their suppliers, who are also hard pressed for cash.

The Italian government and the European Commission need to step up to the plate, and push harder for advances in world trade talks to lead to a fair global trading regime.

Calls at VicenzaOro First for innovation, creativity and skilful marketing by the talented Italian sector are justified, but the brutal fact of cheaper, skilled competition from overseas in a tough, recession-hit market-place is impossible to ignore.

The outlook is that we may see increasing consolidation of the Italian goldsmith sector, as small, traditional family-based companies which in some cases are struggling to survive, may see no alternative but to merge with other companies to gain economies of scale.

And increased outsourcing of routine manufacturing processes to low-cost centres, such as Thailand and China, seems inevitable.

But the danger is, how to distinguish a "Made in Italy" product from a more globalised article?

"Made in Italy" remains a key marketing device to differentiate the supremacy of Italian design skills over the fast-emerging global competition.

The Italian jewellery sector must define very clearly what constitutes "Made in Italy" in order to maximise the sales potential of the best products that the sector can deliver.