By Bongiwe Zwane- Maseko and Ntombi Mhlongo
Retailers across the Kingdom have raised serious concerns against Asian-owned wholesalers who they claim exercise unfair business practices. The bone of contention is that retailers of Asian origin are offered goods on credit while the same courtesy is not extended to Swati-owned businesses. Retailers say besides being unethical, this also smacks of racism. The Federation of the Eswatini Business Community (FESBC) and Swazi Commercial Amadoda have confirmed being aware of these allegations. Retailers say this practice poses unfair competition to their already crippled businesses because they are in competition with people who do not face the same struggles.
“It is a known fact that certain wholesalers offer a credit facility to Asian-run businesses only. When we approach them for similar arrangements, they turn us down blatantly or cite reasons which are just an excuse. By denying us the same arrangement, we suffer as we are unable to stock the goods we need and our customers then prefer to buy from Asian-run businesses, which sets us back. Additionally, some wholesale owners partner with their countrymen in the running of businesses and you find that many times, the wholesaler, and retailers are the same people,” said one businessman.
He added that the Covid 19-pandemic and political unrest affected business operations in a major way and therefore they cannot afford to add unfair competition practices to their woes.
“We have suffered enough in the past few years and this unfair competition is adding to the stress in a major way. Our customers barely have any money left in their pockets after payday and we need to give them good deals when they walk into our shops but we are unable to do so because we are competing with people who already charge less and have fully stocked shelves,” he said.
Federation of the Eswatini Business Community (FEBSC) Head of Transformation Mavela Sigwane confirmed that the issue of unfair business practices by certain wholesalers was a thorn in the flesh.
“This issue has been going on for a very long time and it is unfair, to say the least. Many retailers have been complaining about the same issue over and over. These people have made operating in the retail space difficult. They give their fellow countrymen stock and deliver to them while indigenous Emaswati suffer. This is not fair at all,” he said.
Sigwane said the Eswatini Competition Commission should deal with matters proactively by investigating all matters brought to their attention, whether formally or informally.
“They are experts on these matters and should be leading the way. They cannot expect all complaints to be formalised because people may have their reasons for not doing so. In addition, if they want formal complaints to be made, then they need to run a public campaign that promotes that. How can people do something they are not aware they have to do? It is an unfair expectation,” he said.
He highlighted that many wholesalers in the kingdom are retailers and wholesalers – which is not fair to retailers.
“If any member of the public can walk into a wholesale facility and purchase an item, then this poses unfair competition to retailers. This should not be allowed to go on,” he said.
Sigwane said FESBC is currently in a drive to establish partnerships with stakeholders who have an influence in the trading space. This includes parastatals such as Eswatini National Provident Fund, Eswatini Public Procurement Regulatory Authority and Eswatini Competition Commission.
Similar concerns have also been raised by the Swazi Commercial Amadoda through its Vice President Albert Mbuyisa. He said members of the entity have now and again raised concern that the wholesalers seemingly prioritised foreign businesspeople, compared to Emaswati.
Mbuyisa said in his view, that the Asian community has a way of empowering each other such that they can get stock for their shops and be allowed to pay after the month once they have raised enough money.
“While the members are recovering from the Covid-19 pandemic, the biggest challenge is that the items they have to sell have now become expensive at the wholesales. Also, they do not empower each other as Asian businesspeople do. The Asians have an advantage because the wholesalers can allow them to take stock on credit and they pay later, a privilege that the locals are not afforded,” he said.
The Eswatini Financial Times contacted Ruchi Wholesalers, which prides itself as the best wholesale of all groceries, culinary, liquor, lubricants, cutlery, and body care products.
Nkosingiphile Silindza, who agreed to speak to us as someone in the Sales Department said there was nothing sinister with allowing certain businesspeople the privilege of taking stock on credit.
She said even locals were allowed to take the stock and pay later.
“There is a LiSwati businessman from Pigg’s Peak, he does that most of the time. He takes stock on credit and I do the quotation myself and then I confirm with my superiors if it is okay for him to take on credit. My superiors then request to see the order number and I submit it after which they approve,” she said.
She was asked if there were other Emaswati who were allowed to take on credit besides the businessman from Pigg’s Peak and she explained that she was only aware of this one since she handled his orders.
“These allegations are just not true,” she emphasised.
She was asked if all laws were followed by the wholesale including those that were related to the type of people that should purchase. In particular, she was asked if it was true that they allowed normal citizens to just come into the wholesale and buy their groceries.
In response, she said, “Yes, they do it, however, I may not be sure of what the law says. The people do come and do their groceries but whether it is allowed by the law or not, I will have to ascertain from my superiors,” she said.
The management of Price Rite Cash and Carry in Manzini denied the allegations but refused to delve into the matter.
“All I can say is that we offer goods on credit to loyal customers. The race is not used as a criterion. In fact, we do not like offering credit at all but our customers often plead with us to do so and we do not have a choice but to comply,” said the manager, who refused to be drawn into further discussions.
The Eswatini Competition Commission said they were not aware of this practice and would require more information. The Commission’s Manager of Advocacy and Communication, Londiwe Qwabe said anyone who has information is encouraged to come forward and report to the Commission to provide more information on the alleged conduct. She said this will enable the Commission to determine if there has been a contravention in terms of the Competition Act, No 8 of 2007.
The Minister of Commerce, Industry, and Trade Manqoba Khumalo said the matter has not been formally reported.
“The Competition Commission has informed me that none of the local retailers has reported this matter to them formally. I have engaged them to see if this allegation can be investigated. I can assure the nation that when such a practice is formally reported, it will be definitely investigated and addressed comprehensively by the ministry through the Competition Commission. We hope that this article will unearth some evidence and thus give the aggrieved parties the courage and basis to report the matter formally,” he said.