30 August 2018
The Federation of Unions of South Africa (FEDUSA) and South African Typographic Union (SATU) congratulates Commissioner Tembinkosi Bonakele of the Competition Commission for initiating an investigation after the organisation received a complaint concerning the Publishers’ Association of South Africa (PASA) and its 91 members for fixing prices of books said Dennis George FEDUSA General Secretary.
Evidence was presented to the Commissioner concerning price fixing between PASA, publishers, book importers and sellers of books. The members of the PASA are the main suppliers to government departments, educational institutions and retailers among others.
The evidence indicates that PASA and its members allegedly agreed to fix prices for and trading conditions in respect of:
- Pre-school to grade 12 books, associated teacher’s guides and support materials;
- Student textbooks, learning material, associated teacher’s guide and support material for Technical and Vocational Education and Training Colleges (TVET) at secondary education;
- Textbooks and other publications for learning at tertiary education institutions;
- Trade books (books for sale to the general public); and
- eBooks (Electronic versions of all of the abovementioned books).
This price fixing arrangement appears to be historic in the industry dating back as early as 1980s.
The recent research of the World Bank concerning intensifying competition found that price fixing in South Africa results in very high mark-ups, inflating books prices produced or imported in the publishing sector. Moreover, the research found that mark-ups above normal profits across the entire economy (excluding rents from the extractive industries) are approximately close to 10% of GDP in the country. The study estimated in a scenario that new investment opportunities, exports, 405, 000 new jobs and higher real wages could be created by 2030 if competition is intensified in South Africa. It is also important to recognise that with cheap books and higher labour incomes, the poverty rate would also be reduced to 11% by 2030, while lifting an additional 1.1 million people out of poverty, concluded the World Bank.
The evidence indicates that the price fixing practice is widespread across the industry and that books are important to any nation that the leaders of the cartel be criminally prosecuted. The industry must also pay damages if the impact of their activities are measured to the damaged that they caused to the people of South Africa added George.
FEDUSA is the largest politically non-aligned trade union federation in South Africa and represents a diverse membership from a variety of sectors in industry. See www.fedusa.org.za for more information.
For interviews please contact:
FEDUSA General Secretary
Eddie De Klerk
082 567 6638
SATU General Secretary