The National Clothing Retail Federation said yesterday that it was of huge concern to everyone in South Africa - employee, employer and consumer - that the Newcastle Chinese Chamber of Commerce was closing 85 Taiwanese and Chinese factories in response to a dispute with the bargaining council.

The federation was responding to a media report that action was being taken because of alleged non-compliance with the minimum wage of R324 a week enforced by the bargaining council of the clothing manufacturing sector.

"The implication is that the bargaining council and its stakeholders are sending out a message of increasing lack of confidence in our local manufacturing industry," said Michael Lawrence, executive director of the National Clothing Retail Federation.

"This means local retailers will have difficulty trusting South African-based manufacturers and could seek other sources of productionoffshore," Lawrence said

He said South African retailers were always looking for opportunities to source clothing from reliable, sustainable local sources.

According to the report, the Newcastle Chinese Chamber of Commerce requested government intervention after the bargaining council and the factory owners failed at a meeting on Friday to resolve the dispute.