Strict conditions placed on the merger of two giant publishers of school textbooks have not eliminated concerns that the market still fails to provide schoolchildren with reasonably priced, high-quality books. The Shuttleworth Foundation, which strongly opposes the merger, has recommended that the government investigates the whole school textbook market.
Last week the Competition Commission announced it would not oppose the merger of Maskew Miller Longman (MML) and Heinemann. The matter came before the commission because MML’s London-based owner, Pearson, had acquired Heinemann’s parent company, Harcourt.
School textbooks constitute the lion’s share of South African publishing: 74% of all locally published books are for the school market, according to a report released this year by the national department of arts and culture. The same report says 93% of all books used in schools are locally produced and estimates total turnover in this market at R1,4-billion this year.
The Shuttleworth Foundation’s written submission to the Competition Commission argues that this market is overconcentrated in the hands of too few players already and that merging MML and Heinemann will give the new entity a 50% share of the market.
The merger will narrow the range of textbooks and push their prices up, the foundation argues. ‘Considering the wide-ranging demographics of our country and the varied cultural backgrounds of the population, it is critical that students be provided with textbooks and study materials which they can understand,†the foundation says. It adds that textbooks often are the only books a child might get to see.
The commission ruled that Pearson could not ‘integrate the businesses or any of the business functions or operations†of MML and Heinemann without the its written consent.
‘We welcome the commission’s decision, which effectively prohibits the merger locally,†says the Shuttleworth Foundation’s intellectual property fellow, Andrew Rens. ‘The condition imposed has real bite, because the commission has huge powers: it can break up companies and force sell-offs if they violate agreements such as that now reached with Pearson.â€
Pressed by the Mail & Guardian this week about whether Pearson was considering merging the local entities, Pearson chief executive John Fallon neither confirmed nor denied this, but said the company is looking into Heinemann’s ‘business and plans in detail†to consider ‘the best way forwardâ€.
Acknowledging that the commission will have to approve any merger, Fallon says: ‘We will act in the best long-term interests of our shareholders and of the customers and staff of both companies.†He insisted that educational publishing in South Africa is ‘highly competitive with lots of strong existing playersâ€.
Duncan Hindle, the director general in the national education department, says the government ‘is comfortable with the commission’s decision and so unlikely to pursue the matter any furtherâ€. He says the department does consider price in compiling textbook catalogues, but acknowledges that schools often do not do so ‘significantly†when they select from these catalogues.
‘The government generally needs to take a hard look at the whole market,†Rens says. The Shuttleworth Foundation will continue to work on promoting wider access to learning materials, both print and digital.
‘Beyond this merger, the larger problem of overconcentration in the textbook market remains,†he says. ‘Children are still not getting the books best suited to them and, in some cases, not at all.â€
The commission’s manager of mergers and acquisitions, Tembinkosi Bonakele, says the commission has ‘no intention at this stage to look further into the textbook marketâ€. Trade and Industry Minister Mandisi Mpahlwa, who has the power to appeal against the commission’s decisions, did not reply to the M&G‘s questions.