Existence of exclusive supply agreements between certain schools and school uniform suppliers may have adverse effects on competition, an investigation by the Namibian Competition Commission (NaCC) has found.
This is after the commission was 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 the country.
The complaints, according to the commission, specifically alleged there are school uniform suppliers who have entered into exclusive supply agreements with certain schools.
As a consequence, the commission said, potential or new school uniform suppliers cannot enter the school uniform market to compete with suppliers benefiting from exclusive agreements.
“These agreements will 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 said in a statement on Friday.
The commission further established the common practice that has existed for many years, and puts pressure on consumers (parents and guardians) to buy uniforms from the schools’ preferred suppliers.
This practice, according to the commission, is said to be carried out to promote uniformity, reliability and the alleged ability to meet demand requirements.
However, as a consequence of these types of agreements, consumer welfare is reduced, as consumers are denied the choice of sourcing uniforms from affordable alternatives, said the commission.
“The commission is of the view that schools ought to only provide a general standard of the school items required without dictating from where the parents/guardians should purchase such items,” the statement reads.
“The commission, therefore, wishes to advise involved schools and school uniform suppliers to refrain from further engaging in these exclusive supply agreements, as they may be in contravention to the relevant sections of chapter 3 of the Act, and may be liable for a pecuniary penalty of up to 10% of an undertaking’s global turnover.”
The commission recommends school uniform features be as generic as possible, so that they may be obtained from different suppliers – and that schools should provide these specifications to learners, parents and guardians to enable them to make informed decisions as to where they can source the supply of their uniforms.
The commission further recommended schools to annually invite new and/or potential uniform suppliers for possible consideration.
Schools are encouraged to publish in local newspapers and social media platforms on an annual basis extensive lists of suppliers from where school uniforms can be sourced.
The commission, in addition, also recommended that 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.
“Contracts entered into between schools and uniform suppliers [should] be limited to a short period of time, preferably three years, and renewable through a new open selection process,” the commission said.
“We will be monitoring developments in the supply of school uniforms market and, therefore, reserve the right to investigate any possible anti-competitive practices in future should the need arise.”