Commission warns school uniform monopolies - report

2016-12-18 14:43

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Johannesburg - The Competition Commission has focused its attention on alleged monopolies in the R10-billion school uniform industry, the Sunday Times has reported. 

"This is the consequence of the absence of a fair and competitive bidding process," commissioner Tembinkosi Bonakele was quoted as saying in an article that appeared on Sunday.

He said that the commission was concerned about deals made by schools whereby only a single supplier of their uniforms is appointed and that his organisation had received nearly a dozen complaints in this regard.

'Shameful' mark-ups

"In many instances these agreements are indefinite and some companies have had exclusive rights for decades," said Bonakele.

Often these suppliers had "free reign and mark-ups are shameful".

The practice is apparently evident in both private schools and government Model-C schools. 

For example, according to the Sunday Times, the commission had already met with executives from private schools run by Curro Holdings.

A parent, whose children attend Curro, was interviewed by the newspaper and told of how he was forced to buy a uniform set for winter and summer that cost R1 500 while at a Gauteng retailer without the school branding, the same items cost R515.

"Curro owns a school clothing company… they determine their own prices," he told the newspaper. 

Curro CEO Chris Van Der Merwe was unavailable to comment to the Sunday Times.

Basic Education department spokesman Elijah Mhlanga said that they were working together with the commission on the matter. 

"We have both spoken out against it and even went further to place newspaper advertisements in which the commission warned against anti-competitive practices."

In a separate opinion piece published in the Sunday Times, Bonakele said that investigations conducted in May last year showed the practice remained widespread.

"In the face of continued defiance, the commission will have no option but to apply its enforcement powers. When this eventually happens, penalties will be severe."

Bonakele said the commission had recourse to impose an administrative penalty of up to 10% of a firm's turnover for the previous year.

Read more on:    johannesburg ­  |  education

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