Comesa throws spanner into Sadolin’s works

The competition’s commission of the Common Market for Eastern and Southern Africa (Comesa) has declined to give a trademark license to Sadolin (U) owing to the complications in the agreement signed between AkzoNobel South, who own the Sadolin brand in Uganda Africa and Regal Paints Uganda, who are the local distributors of Sadolin paint.

Late last year, Sadolin, through AkzoNobel had applied for this license which is a key requirement for one to trade within the region and to distinguish its brands within Comesa but the commission reportedly declined after it reviewed complaints from competitors, sources told us.

“The whole issue was complicated because when we reviewed the agreements, we realised that a trademark would infringe on some of the existing rules,” said one of the the sources at Comesa.

We have learnt that for most part of today (May 3), Sadolin top executives were locked up in a meeting, trying to digest the decision and how to respond to it.

Sadolin’s Public Relations Manager Felix Adupa Ongwech told The Nile Post in an interview that their competitors were trying to fight them on the local and regional market.

“They will not succeed. When you look at the agreement that they say is a bone of contention [at Comesa], it is clear. We only use Regal Paints for sales and distribution,” Andupa said.

He said since their takeover by AkzoNobel, some of their competitors, whom he declined to name, have been trying to push them put of the market.

“AkzoNobel is a very big global brand so we are here to stay,” Ongwech said.

AkzoNobel took over the Sadolin brand last year, following termination of a license agreement it had with Sadolin East Africa’s which had just been acquired by Kansai Plascon.

In a bid to ensure continuity of the Sadolin brand on the market upon the relaunch, AkzoNobel entered a partnership with Regal Paints Uganda; a subsidiary of Kenyan based Crown Paints East Africa.

Complaint

The commission in an inquiry notice it issued in February 2018 said the agreement could violate competitions rules within the area, where distributors of similar products exist.

“The commission will in accordance with the provisions of the regulations determine among other things whether or not the agreement is likely to affect trade between member states and has as its object or effect the prevention, restriction or distortion of competition within the common market,” read part of the notice.

The commission in particular probed this trade relationship of the three paint firms (Regal AkzoNobel and Sadolin) after there were fears that it could give them unfair advantage over their competitions and that the triumvirate could be in breach of the trade rules.

This ambiguity on whether Sadolin paint currently on the market is imported and distributed by Regal (as initially claimed) or manufactured at the Regal plant, has raised suspicions amongst some industry players, some of who believe Regal Paints is selling its own paints and branding them in Sadolin tins.

John Mwesige, a member of Comesa competition’s commission which is based in Malawi, Lilongwe, said they were still evaluating the complaints.

“When we finalize, we shall announce our decision. It will be soon,” Mwesige told us on phone.

But sources insisted a decision was reached long ago and communicated to Sadolin.

Comesa is a free trade area with 20 member states. It was formed in December 1994, replacing a Preferential Trade Area (PTA) which had existed since 1981.

In 2008,  the body agreed to an expanded free trade zone including members of two other African trade blocs, the East African Community (EAC) and the Southern Africa Development Community (SADC).