S&V Weekly Newsletter Vol.8 No.18, May 3 2022

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SARS/DTIC plan to donate seized apparel to flood victims

Industry reaction ranges from caution to outright rejection

The SA Revenue Service (SARS) and the Department of Trade, Industry & Competition (DTIC) have proposed to the apparel industry that confiscated illegal imports currently held in warehouses be donated to victims of the floods in KZN last month.
      Director: Leather & Footwear at the DTIC, Dr Jaywant Irkhede, said on Friday that SARS was sitting on 3 000-4 000 tons of clothing, blankets and footwear which had been seized since 2019, because it was under-invoiced, counterfeit or second-hand.
      "Their warehouses are full, and it costs them to store it," he said. "Under current regulations, it is possible to use it for social welfare.
      "We had an online meeting yesterday [Thursday] with industry associations and unions, and there was agreement in principle, but that there needed to be a framework. The industry was worried that some of the goods would be sold commercially by corrupt officials.
      "The essences of the agreement is to ensure transparency,  goods to reach victims, oversight and to stop any potential corrupt activities.
      "Government will not release any goods for donation until the framework agreement is signed off by all parties."
      He asked for feedback from industry, and specifically he asked S&V readers to give their opinions.
      Michael Lawrence, executive director of the National Clothing Retail Federation of SA (NCRF), which represents most national chains, said "the first concern about any form of product that can be commercialised is that you run the risk of the wrong people getting hold of it for the wrong reasons.
      "We were asked a question with no indicators that this had been thought through. These are unusual circumstances, but it is open to corruption..The concerns for me are undermining local production capacity, disrupting basic commercial activity between producers and retail - there's a lot of retail out there without the capacity or the desire to check on the source of its goods - product that as been imported with particular branding on - store or product - which could lead to reputational damage, and so on.
      "What we also have no idea of is how much businesses have already given to NGOs. The scale of disaster is not underestimated by industry, but without a clear understanding of what is needed, it's not difficult to say no.
      "A framework agreement is being constructed. Government gets to decide what it does with seized goods. As industry, we have very limited rights. At this stage we are probably not madly averse to the blankets being released. Every winter is a problem in its own way, and there are always appeals for blankets. What we don't want is start treating disadvantaged people as disaster relief.
      "We don't think that the quantum and nature of second hand clothing is huge. We would probably be open to NGOs being able to look through second hand goods. We are quite confident about the NGOs. If we call it for disaster relief only we won't have people queuing up to import second hand goods in anticipation of a disaster.
      "However, with anything that involves new clothing, we need to be very careful. We will look at the framework. It already has the potential to be a market disruptor. it's tough. We have declared our concerns to the government departments we have engaged with. They have appreciated our concerns. Nothing is happening yet - that's the commitment we were given.
      "Separately from this, we have started a discussion at NEDLAC about seized goods. We need smarter solutions. We need good data and analyse them in good ways."
      Paul Theron, Executive Director of Apparel Manufacturers of SA (AMSA), wrote: "There is an enormous amount of support and sympathy for those devastated by the disastrous floods and the associated consequences thereof.
      "An agreement has been reached between the stakeholders at a national level to support the humanitarian crisis in KZN with a firm proviso regarding management and control of the distribution by SARS of seized goods, based on product specific needs.
        "A Memorandum of Agreement between SARS and stakeholders is to be drawn up. Hopefully this process will not drag on as the need was yesterday already.
      "The past performance of lack of integrity by officials at the local level is the greatest concern.
      "The use of established credible private sector agents, such as Gift of the Givers, would have been a preferred channel and hopefully this could still eventuate."
      Jirka Vymĕtal, executive director of the Southern African Footwear & Leather Industries Association (SAFLIA) said "SAFLIA agrees wholeheartedly with the views expressed by the NCRF. Also, SAFLIA has at numerous SARS meetings reiterated the understanding that illegal imports of footwear will be destroyed.
      “From a footwear perspective, SAFLIA has not agreed to any Memorandum of Agreement between SARS and stakeholders.”
      He said SARS was "opening a can of worms here...where does one draw the line?"
      He said illegal goods hadn't been distributed to victims of disasters before, and he questioned whether this would become policy in future.
      He doubted the capacity to "properly police this proposal".
      "SAFLIA’s line is illegal imports must be destroyed. No grey areas. However, SAFLIA is just a small player here and we do not wish to influence the clothing/textile sector and their decision - regarding clothing and textiles -will be respected."


 

Wage negotiations: Second rounds this month

Durban, KZN, SA – The second rounds of wage negotiations for all 3 sectors of the National Bargaining Council of the Leather Industry of SA take place this month, NBC Gerald Naidoo said on Friday. General Goods & Handbags takes place in Cape Town on 04 and 05 May, Tanning takes place in Port Elizabeth on 10 and 11 May, and Footwear takes place on 18 and 19 May.

SAPS face mask supplier found guilty of excessive pricing, fined R3.4 million by Competition Tribunal

Pretoria, Gauteng, SA (29 April 2022) – The Competition Tribunal has found that Tsutsumani Business Enterprises CC charged the South African Police Service excessive prices for the urgent supply of 500 000 face masks during the COVID-19 pandemic, in April 2020 – and has ordered the supplier to pay a R3.4 million administrative penalty.
      In its order, the Tribunal has found that Tsutsumani contravened section 8(1)(a) of the Competition Act (“the Act”) read with Regulation 4 of the Consumer and Customer Protection and National Disaster Management Regulations and Directions in Government (“the Consumer Protection Regulations”), during the period 5 April 2020 to 29 April 2020.
      In addition, the Tribunal has ordered that Tsutsumani must pay the administrative penalty totalling R3 441 689.10 within 30 business days.

  Tribunal’s determinations The Tribunal has concluded that Tsutsumani enjoyed market power during the complaint period and was dominant in the market for the emergency procurement of masks by SAPS from suppliers registered on National Treasury’s Central Supplier Database who were able to satisfy the requirements of SAPS’ Request For Quotations, to supply the masks within a very short time period. Tsutsumani accordingly acted in contravention of section 8(1)(a) of the Act, read with Regulation 4 of Consumer Protection Regulations as alleged by the Competition Commission in its complaint referral.
      The Tribunal’s reasons will be publicly available in due course.

  A case of firsts This case is the first excessive pricing case referred to the Tribunal by the Commission in the context of a tender process during the pandemic.
      It is also the first case that falls to be determined under the Consumer Protection Regulations, read with section 8(1)(a) of the Act. This is because while the Tribunal and the Competition Appeal Court previously considered excessive pricing in the context of a national disaster in the Babelegi decisions, the Consumer Protection Regulations were not yet in force at the time of Babelegi’s conduct.

  Background Tsutsumani was accused by the Commission of charging the SAPS excessive prices for the urgent supply of 500 000 3-ply surgical face masks during April 2020. Tsutsumani was responding to a RFQ issued by the SAPS, for the urgent procurement of personal protective equipment from various suppliers. This was necessitated by the COVID-19 pandemic and the National State of Disaster which required all SAPS staff to wear masks. SAPS required nine million masks per month for use by its staff in the frontline of combating the coronavirus during the lockdown.
      Tsutsumani denied the excessive pricing allegations.

They Said It

"I visited Froggie on Monday 5 days plus after the rains and was shocked at their situation - if it had been me I would have been suicidal..." - Garth Ribbink, member, A. Greenaways (Natal), Durban, KZN, SA, on the floods which hit the province 2 weeks ago. The company was one of the worst affected in the riots and looting last July when its premises and stock were torched.

Got anything you'd like to share?

Do you have any suggestions, comments or experiences about the industry that you'd like to share with the industry? - tony@svmag.co.za

03/05/1949: Sam Wells, Malome Leather Technologies, Boksburg, Gauteng, SA.
03/05/1951: Ron Rink, retired, formerly Puma, Cape Town, W. Cape, SA.
03/05/1953: Alex Leith, left the industry, Durban, KZN, SA.
03/05/1964: Rafique Vahed, Casual Boyz, Estcourt, KZN, SA.
03/05/1972: Afzal Deedat, Speed Zipper, Durban, KZN, SA.
04/05/1940: Isaac James, retired, formerly Step High Shoe Boutique, Cape Town, W. Cape, SA.
04/05/1948: Martin Nefdt, agent, Port Elizabeth. E Cape, SA.
05/05/1963: Pradeep M Bhoola, Hardy's Outfitters, Pretoria, Gauteng, SA.
05/05/1967: Vernon Lotter, Comfy Feet Shoes, Jeffery’s Bay, E. Cape, SA.
06/05/1932: Yusuf Sayanvala, Westgate Wholesalers, Brits, N.W. Province, SA.
06/05/1979: Stelio Krystallidis, K-West/Fashion Trims, Johannesburg, Gauteng, SA.
07/05/1947: Mike Rolfe, retired, formerly Barker Footwear, Cape Town, W. Cape, SA.
07/05/1955: Mark Tovey, retired, formerly Global Golf, Johannesburg, Gauteng, SA.
07/05/19??: Gerard Aarnikhof, formerly Angels Shoes, Cape Town, W. Cape, SA.
08/05/1950: David Boast, retired, formerly African Hide Trading, Port Elizabeth, E. Cape, SA.
08/05/1956: Jeff Human, John Whittle Components, Cape Town, W. Cape, SA.

In Memoriam this week

05/05/2001: Raj Kallichurum (b. 23/02/1954), Shoe Component Supplies, KwaDukuza, KZN, SA.
06/05/2016: Herbert Lohmeier (b. 25/11/1954), H. Lohmeier Men’s Outfitters, Swakopmund, Namibia.
06/05/2018: Tony Bradshaw (b. 22/06/1952), left the industry, formerly Jack & Jill [closed], Port Elizabeth, E. Cape, SA.
08/05/2010: Bob Hunter (b. 18/11/1938), footwear agent, Johannesburg, Gauteng, SA.
08/05/2018: Peter Jönsson (b. 01/04/1967), formerly TFL SA and others, Johannesburg, Gauteng, SA.

Have you let us know about your birthday, or the birthdays of your colleagues? Our readers love this section, so please become part of it. This also applies to the In Memoriam section. Help us remember former colleagues.

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ABSA Agri Trends: Hides & skins prices

Johannesburg, Gauteng, SA (28 April 2022)) - The current average hide price decreased by 8.0% to R5.11kg from R5.55kg a week ago. The current price is 25.2% lower than the average price a month ago and is 32.4% lower than the average price a year ago. The range of prices reported was as follows: Minimum price: R5.00 Maximum price: R6.00. Please note: Our methodology weighs the prices we collect according to the number of hides they sell in a month. This is done to make it more representative of the prevailing market price. NB* Hide prices are determined by the average of the RMAA (Red Meat Abattoir Association) and independent companies. - Marlene Louw, senior agricultural economist, and Nkhensani Mashimbyi, agricultural economist, Absa group.

Note: For previous prices, see HERE

Have a look at these links

We invite businesses to send us links to websites, Facebook pages and the like which they feel would be of interest to others. The links below are from our database:
H.C. Hansen Leather Goods, Bloemfontein, Free State, SA. Leather goods manufacturer.
Health Wise, East London, E. Cape, SA. Health products retailer.

Classified Adverts

AGENTS WANTED

Willowton Footwear is looking for shoe agents to represent our shoe company in all provinces of South Africa, excluding Eastern Cape. Kindly contact us by email at sales@willowton.com.

SECOND HAND THICKNESS GUAGES FOR SALE

R750 each excl VAT.

Contact Clive Jackson-Moss
082 926 1023
(selling on behalf of someone else)

Contact us

News & Classifieds: Tony Dickson, +27 (0)31 209 7505, tony@svmag.co.za

Next newsletter: May 9, 2022.

SAFLIA enquiries: Tel 0800SAFLIA * Email info@saflia.co.za * Website http://www.saflia.co.za

Our website www.svmag.co.za