By: Nghiinomenwa Erastus
Various parents around the country have reported certain schools to the country competition watchdog after they are forced to buy school uniforms from one supplier by their respective schools.
The Namibian Competition Commission (NaCC)’s statement released at the end of October 2021 revealed.
The NaCC highlighted that parents and other suppliers had reported anti-competitive behaviours facilitated by schools (public and private) in school uniforms supply.
“The Commission has been inundated with numerous complaints from parents and some school uniform suppliers alleging possible anti-competitive practices in the supply of school uniforms to public and private schools in Namibia,” the Commission wrote. NaCC explained in the statement that the complaints alleged explicitly that school uniform suppliers have entered into exclusive supply agreements with certain schools.
Due to these exclusive agreements, potential or new school uniform suppliers cannot enter the school uniform market to compete with suppliers benefiting from exclusive agreements.
The competition watchdog explained that the complaints were
assessed to determine whether there have been possible infringements on Chapter 3 of the Competition Act, 2003.
The assessment revealed that schools have entered into
exclusive contracts with specific uniform suppliers creating monopoly and cartels-like-structures in the sector if competition literature is referenced.
From the assessment conducted, “the Commission established
the existence of exclusive supply agreements between certain schools and school uniform suppliers”.
The Commission is also of the view that these agreements may adversely affect competition.
“These agreements have the potential to prevent and lessen
competition as they prevent other uniform supplying competitors from gaining access or growing in the market,” the Commission wrote.
According to competition literature, if markets are free and
unregulated, pure competition may result.
Theoretically, consumers can buy what they want at
the best price, while sellers who overcharge cannot get rid of their goods.
However, if markets are controlled, prices and profits
can also be controlled by a few individuals.
The Commission further established that the practice has
existed for many years, and it “places pressure on consumers (parents and guardians) to buy uniforms specifically from the schools’ preferred suppliers”.
According to the Commission, monopolies are being created
through this practice to promote uniformity, reliability and the alleged ability to meet demand requirements.
However, it limits and forces parents to buy from the chosen manufacturer even though more suppliers could do the same work at different prices.
“As a consequence of these types of agreements, consumer
On the other hand, welfare is reduced as consumers are denied the choice of sourcing uniforms from cheaper alternatives, the Commission found.
SOLUTIONS TO PREVENT MONOPOLY
Given that tailoring is one of the most offered courses at various vocational training centres, with more young people and women participants than others, the monopolistic and anti-competitive practice in the school uniform supply can disadvantage many.
The Villagers observation of various incubators around the country has established that they are full of tailoring businesses.
The Commission believes that schools ought only to provide a general standard of required school items.
“Without dictating where the parents/guardians should
purchase such items from,” said the Commission.
The competition watchdog also advised involved schools and
school uniform suppliers to refrain from further engaging in these exclusive supply agreements as they may be in contravention to Chapter 3 of the act.
They may also be liable for a pecuniary penalty of up to 10% of an undertaking’s global turnover.
The Commission recommends that school uniform specifications be as generic as possible so that they may be obtained from
different suppliers.
Schools should provide the specifications to learners/parents to enable them to make informed decisions as to where they can
source the supply of their uniforms.
NaCC also suggests schools annually invite new and/or
potential uniform suppliers for possible consideration as suppliers.
Schools are encouraged to publish extensive lists of suppliers from where school uniforms can be sourced in local newspapers, social media, and other platforms.
Furthermore, schools should contract with all able school
uniform suppliers following a transparent selection process to allow all potential suppliers to have an equal opportunity to compete.
It is also advised that contracts entered into between schools and uniform suppliers be limited to a short period of time, preferably
Three years renewable through a new open selection process.
The Commission has emphasized that it will be monitoring developments in the supply of school uniforms market and therefore
reserves its right to investigate any possible anti-competitive practices in future, should the need arise.
Consumers (parents and guardians) are encouraged to report
any observed/known, exclusive uniform supply agreements in the future. Email: erastus@thevillager.com.na
