Articles

THE INFORMAL LABEL MANUFACTURER


The informal label manufacturer industry is a common sight in many developing countries where they strongly compete with the formal label manufacturer companies. In certain places such as Latin America or Asia the local regulations are not strong enough (or not upheld with enough strength) the informal label manufacturer industry has reached a considerable size and do give more than a headache to the law-abiding, tax-paying formal label manufacturer sector.

The informal label manufacturer industry has a good market share of its own in those places of the world. Many local businesses - that also find a way to avoid local regulations as the informal label manufacturer companies do - work with informal label manufacturer companies to save money as the average informal label manufacturer usually charges much less for their services. This has of course a great impact on the local economy, but especially on the formal label manufacturer industry.

Local, small-sized formal label manufacturer companies take the worst part of it all. Unable to compete against the low prices offered by the informal label manufacturer companies they loose that market share easily. At the same time, big international label manufacturer firms get most big corporate contracts, leaving the small local label manufacturer with little business possibilities forcing them either to close or join the informal label manufacturer sector in order to survive. The whole process becomes then a circular downfall process were at the end the whole local economy ends up heavily impacted.

Local authorities must therefore intervene and regulate this situation. Formality is necessary for a healthy economy, and the label manufacturer sector is by no means an exception to this statement. It may be true that on the short run the informal label manufacturer gives jobs opportunities to many, but when evaluating the figure as it should be done - as a process that deals considerable damage to the formal label manufacturer industry and the country’s economy on the whole - there are no winners on that struggle but the international label manufacturer corporations that will be able to take advantage of the local struggle and getting a bigger piece of the pie.

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