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Product recalls having knock-on effect, new study finds
The price of products manufactured in low-cost countries is likely to rise as suppliers in countries such as China place a renewed focus on product quality, a new study has found.
According to the Deloitte Consulting LLP report, 41 per cent of executives in developed markets said they expected costs to increase – a figure which rose to 59 per cent in the emerging markets.
The survey also found that a greater number of manufacturers said that product quality and safety, as well as environmental standards had taken on increased importance over the past 12 months when selecting suppliers.
"You'll see a fairly rapid increase in cost structure in the next five years," Craig Giffi, Deloitte's U.S. leader for consumer and industrial products, told Reuters.
"(Manufacturers are) going to get a direct cost hit in those current emerging markets they're sourcing from."
Giffi also said that many companies saw the cost increases as a price worth paying when compared to the financial implications of recalling large swathes of their products.
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