Unfair Business Deals Local Manufacturers Cry Foul of SA Products


By Wezi Tjaronda WINDHOEK Many Namibian companies are losing business due to unfair trade practices from their counterparts in South Africa. This puts more jobs on the line. Not only are the prices of the neighbouring country’s goods more competitive, there are also allegations that agencies are forced to sign contracts to prevent them from supplying Namibian products to chain stores. Lack of markets has resulted in the closure of some companies that add value to raw materials such as the Rietfontein dairy plant last year and also the Zoo Sim pet shop in Walvis Bay last week. Since a year ago, manufacturing companies feel that products from the neighbouring country, with which they cannot compete, flood the local market. The Ministry of Trade and Industry is inundated with complaints of unfair practices that a number of companies in the manufacturing sector are experiencing. These complaints have also been forwarded to the Namibian Competition Commission. Businesses that manufacture and trade in pet food, dairy products, toilet paper and tracksuits have a host of complaints about the business they have lost due to the practices. A&R Pet Supplies, a company that mixes and packs pet food says since the flooding of the market with South African products, they have lost 30 percent of their business, which translates into between N$20 000 and N$30 000 per month. Zoo Sim closed shop last Friday even before the ministry could attend to its complaints. According to Heidi Gremsing, owner of Zoo Sim, which has been in existence since 42 years ago, the company last year lost 15 percent of the business it used to have. “I have lost out to many shops that sell pet food,” she said, adding that for the market she has now it is a matter of time before they get other suppliers, because “I cannot afford them”. “They will accommodate both of us for some time and then use us less and less and less,” she added. Co-owner of A&R Pet supplies, Roland Bauer told New Era yesterday if the company does not get more shops to supply to, it would close down its business, situated in the Southern Industrial area, which employs two workers. “Until now, we have managed but for how long, we don’t know,” he said. In a letter addressed to the Permanent Secretary of MTI, the NCC and copied to the Ministry of Agriculture, Water and Forestry and also to the Agronomic Board, Bauer said the local companies were being pushed out by actions of South Africans to the extent that they have drawn up contracts with local agents to only supply South African products. “In a particular case, we the pet supplier are not allowed to deliver to local chain stores because the Namibian agents were forced to sign a contract with SA suppliers,” said the letter. An agent that supplies mainly South African products to the retailers in Namibia, Pro trade Agencies said yesterday it would be more than happy to supply Namibian products if they were available. Of the 26 producers that it supplies products for, one is Namibian, A&R Pet Supplies. The rest, said John Gerber, MD of Protrade Agencies are products that are not produced locally. It is a matter of business ethics that do not allow the company to sell South African products and at the same time take on competing products, rather than that it signed contracts not to take on local products, he added. Other matters that have been brought to the attention of the ministry include a toilet paper manufacturing company Professional Support Services, which complained about Shoprite’s stoppage from printing the Rite Brand 10s and the singles toilet paper. The chain store, according to the letter that was forwarded to the PS for Trade and Industry Andrew Ndi-shishi, “stopped us due to the fact that they fall under the Western Cape and Nampak can deliver on a special to them on Ritebrand/House-brand 10s for N$13.95. “We could do it for only N$14.95. They then informed us that they no longer would be using us as the supplier for Namibia on the Ritebrand/Housebrand toilet paper.” The letter further said the company had only supplied for six months and incurred some costs and then were told that the company would be using Nampak. The company further discussed with Shoprite to buy out the remaining material worth N$280 000 that it has on hand to rescue the company from closing but until now, they have yet to get a response. Ndishishi said in an interview with New Era local manufacturers were finding it difficult to get listed suppliers, which is done in South Africa. According to Geinsing, it costs N$15 000 to be listed as a supplier with a South African retailer, something she said was too expensive to undertake. The local manufacturers have proposed the introduction of a levy on pre-packed South African pet products in order to safeguard local jobs. Bauer and Geinsing said their companies employ local people and use Namibian transport, thereby bringing security to Namibian families. “If we import finished packed bags, what stays here?” Bauer wondered. Due to this competition, A&R Pet Supplies has only found markets for seasonal products at many chain stores which many people frequent. Last year, the company was delisted from the supplying Agra Cooperative pet food, which restarted this year after negotiations. To find a solution to these problems, the ministry, the manufacturers and the distributors recently held a meeting at which the ministry asked the shops to start supplying local products, failure of which the government would be forced to legislate. One of the ways which Ndishishi said would help improve the situation is the Namibian Board of Trade, which the country is in the process of establishing in accordance with Article 14 of the SACU Agreement. The board will be charged with tariff changes, investigation of unfair trade practices like dumping and subsidies, and investigating tariff impacts on the economy as well as other SACU related issues. In addition to this, Pro Trade Agencies said it would be more than willing to supply Namibian products if the market has any and it would actually “give them preference over South African ones”.