STC introduces distributorship agreement |28 December 2013

The Seychelles Trading Company (STC) will as from next year put in place a new ‘distributorship agreement’ to replace the existing ‘franchise agreement’.

Under the ‘distributorship agreement’ retailers will continue to purchase products and other imported goods from the STC.

This new distribution agreement was presented to the current franchise owners on Thursday in a meeting chaired by STC chief executive Veronique Laporte at the STC conference room in the presence of members of STC board, representatives of the Fair Trading Commission (FTC) and members of the Retailers Association.

FTC representative Francis Lebon explained the need to replace the Franchise Agreement with the Distribution Agreement, saying certain provisions in the Franchise Agreement were not in line with the Fair Competition Act 2009 and the franchise agreements are not governed by any specific law or code relating to the specific relationship that should exist between a franchisor and a franchisee.

Based on the recommendations of the FTC, the STC has voluntarily agreed to enter in an undertaking to amend the current franchise agreement to a ‘Distribution agreement’ to be implemented on February 1, 2014.

During the meeting, Ms Laporte clarified that as per the current practice, under the Distribution Agreement, the STC will not fix any price but the distributors will be free to decide at what price they retail their products. However, the STC will continue to recommend prices for STC products especially for the 14 basic commodities in line with the STC’s role in keeping the cost of living down in Seychelles.

The STC also stated that the company will reinforce partnership with the distributors to ensure availability of sufficient products to meet the needs of its customers in the various districts.
The STC will also provide support such as marketing and stock management.

The new Distribution Agreement will be non-transferable and the distributors will continue to have the liberty to outsource from any other importers, which means they will be non-exclusive distributors of STC products.

Franchise owners who were present at the meeting were given the opportunity to make their contributions and clarify any matter they had.
 
The STC has said that the draft of the new Distribution Agreement will be forwarded to the franchise owners by email for their final input.