Argentina's textile industry is facing a severe crisis, driven by high costs, declining demand, and factory closures, intensified by Economy Minister Luis Caputo's criticism of local clothing prices. Sector entrepreneurs reject official statements and call for reforms to boost competitiveness without job losses. The Italian SME model in specialized production is suggested as an alternative to perpetual protection.
Argentina's textile industry, employing 539,000 workers directly or indirectly and accounting for 2.8% of total employment, is in a critical state. In provinces like Catamarca and La Rioja, 40% of private industrial employment depends on this sector, which features a complete value chain from fiber production to regional brand commercialization.
Recent statements by Economy Minister Luis Caputo reignited the debate: “I have never bought clothes in Argentina in my life because it was a rip-off,” he said, adding that local prices are five to ten times higher than abroad. Cabinet Chief Manuel Adorni suggested prioritizing the 47 million Argentines over industrial protection, citing a pair of jeans costing $100 locally versus $25 imported.
Entrepreneurs like Marco Meloni, vice president of the Fundación Proteger, challenge this view: “One of the biggest problems we have now is demand,” he explained, noting that clothing has become a secondary consumption amid rising tariffs. Meloni detailed that transport and logistics costs rose 100% to 150% in dollars, with installed capacity operating at 25-35%, nearly 500 factories closed, and over 17,000 formal jobs lost.
Camilo Alan, with over 60 years in the sector, criticized Caputo: “An economy minister cannot say such nonsense; it's disrespectful to working people.” Alan stressed they sell below cost and that the issue is lack of consumption, not prices: a shirt costs 39,900 pesos, a T-shirt 13,000. He warned about massive imports and foreign platforms that “destroy you.”
High taxes account for 50% of a premium garment's price, plus logistics costs—more expensive to ship from Catamarca to Buenos Aires than import from China—and wage gaps: an Argentine worker earns $1,000 monthly, versus $135-140 in Bangladesh. Sales dropped 7.7% in Q2 2023, with 14,000 to 17,700 jobs lost in two years.
To overcome the crisis, suggestions include dismantling fiscal pressures, improving efficiency, and focusing on high-value niches, like the Italian model where SMEs drive over 60% of exports through design and sustainability, rather than competing in mass volumes with Asia.
