ANTI-COMPETITION AGREEMENT BETWEEN GS1 AND SHOPRITE SUPERMARKET

Refusal to Shelve Ugandan Manufactured products in any Shoprite Supermarket Store in Uganda.

It has come our attention that, clients that have purchased barcodes from Barcodes Uganda, have been denied access and the right to have their manufactured goods shelved and sold in any Shoprite Supermarket stores in Kampala.

We reiterate that barcodes supplied by Barcodes Uganda are sourced from a single source the International Barcodes Network. We also give an absolute guarantee that once we have sold out a barcodes to a single customer, we shall  never issue out the same barcodes to a different customers, this re-emphases our one off sale policy.
The reason for refusal to have Ugandan manufactured goods, having barcodes purchased from Barcodes Uganda, has    just recently arisen, because our customers who purchased barcodes before 2019, still have their goods shelved and selling in all shoprite supermarket stores.

We have reliable information that GS1 our main competitor and also the dominate figure in barcode sales( not true), initiated an agreement with Shoprite in South Africa to the effect that, all producers and manufactures of goods that want to shelve and sell there products in any Shoprite Supermarket should be referred to the nearest GS1 office to purchase retail product barcodes.

Unlike Barcodes Uganda and all licensees of International Barcodes Network, the GS1 business module is the sale of annual membership and not barcodes sales, meaning in order to be supplied with barcodes, you are mostly likely to pay the following fees to get a barcode and have rights to use the barcode;

  •  Registration fees per barcode assigned to a customer
  •  Recurrent Annual Subscription fees per barcode assigned to a customer
  • Default leads to assigning the barcodes to a different manufacture or producer of retail goods

The BAD implications of the agreement

  • Unless you purchase GS1 barcodes, your goods can not be shelved and sold in any Shoprite supermarket.
  • Compliance with all Uganda Bureau of Standards certification and all other laws certifying that your goods are consumer safe, is not enough, you are still forced to get barcodes from GS1.
  • Manufactures and small scale producers are being forced to purchase barcodes they do not need, to keep GS1 making money through, registration fees per barcode assigned and recurrent annual subscription fees per barcodes assigned.
  • Any barcodes purchased from other authenticity, legitimate and tested sellers like Barcodes Uganda and all International Barcodes Network licensees are subjected to the GS1 barcode data base and once the GS1 data base does not show that its owned by you, the goods are rejected from being shelved and sold by Shoprite.
  • To have your goods shelved and sold you are forced to purchase HIGHLY PRICED GS1 barcodes and incur annual costs to continue using the barcodes.

Social economic and Legal Implications

The agreement between GS1 and Shoprite has created several; undesirable effects among others

  • Curtailed competition that leads to market efficiency
  • Increased the cost of doing business to Ugandan manufactures and producers
  • Created non-tariff barriers to trade, contrary to government policies
  • Created a cartel and a collusion thus breaching all polices and laws against  Anti-competitive business agreements and practices in Uganda, East Africa and COMESA trade block area.

Steps we are taking

We believe and know that the agreement between GS1 and Shoprite Chain Stores, contravenes all the principles of free market economy and laws within our region.

To remedy this Anti-competition agreement and relationship between GS1 and Shoprite we have taken the following steps;

  • Initiated the process to petition the Minister of Trade Industries and Cooperative
  • Initiated the process of filling an Anti-competitive Business complaint with the COMESA Competition Commission.
  • Initiated the receiving of complaints from our customers whose goods have be denied market access with Shoprite
  • Lobbying parliament to intervene.
  • Lobbying all trade associations to condemn and intervene

How you can change this bad business practice.

  • File a complaint with the COMESA Competition Commission at  https://www.comesacompetition.org/ by downloading and filing out the Anti- Competitive Business forms CLICK THESE BLUE LINKS, complaint form and the request for  confidentiality form.
  • Petition or file a complaint with the Ministry of Trade Industry and Cooperative, addressed to the Competition Commission and copied to the Hon Minister.
  • Send us a complaint letter stating what happened to you as you interfaced with Shoprite and GS1

WHAT WE HAVE DONE SO FAR.

1. A complaint to COMESA COMPETITION COMMISSION was filled by Emergency Exit & Partners Ltd the AUTHORIZED AGENT of INTERNATIONAL BARCODES NETWORK trading as Barcodes Uganda. This complaint details the practice initiated by GS1 and implemented by SHOPRITE GROUP in South Africa. The complaint was received on the 22nd of September 2019 by the Commission in Malawi through email and by DHL post. We subsequently had a telephone conference with two officials  
from the COMESA COMPETITION COMMISSION.
2. A petition was also presented to the Ministry of Trade, Industry and Cooperatives, which is a stone throw away from our offices, addressed to the Directors; Trade, Industry & Cooperative, Micro, Small and Medium Enterprises and to the Commissioner Process and Marketing. We had an official conferencing.
On the 7th of November 2019, Barcodes Uganda has been invited to present its case before the Hon Minister of Trade and the Mr. Patrick Okilangole, Commissioner COMESA Competition Commission Board Chairman and Mr. George K.
 Lipimile, Director and Chief Executive Officer COMESA Competition Commission at a two day work shop organized by the Ministry of Trade, Industry & Cooperative to be held at Imperial Resort Beach Entebbe.
3. Visit our Facebook Page BARCODES UGANDA and join the campaign against the  Anti-competitive practice by GS1 and Shoprite group, fight for the right of customer choice to services and goods, access to markets, and against 
monopoly in Uganda.

 

Francis Ocuga  ADV | CFE

Barcodes Uganda Representative