I started to wonder the other day just why Macs are so much more expensive in South Africa than elsewhere.
As I write, an entry-level white MacBook is advertised in the US at $999, or R7,300. They’re more expensive in the UK, for example, R8,700. No doubt tariffs and taxes play a role here. But if I want to buy the same MacBook here in Cape Town, though, I must pay … R12,000. No less than 64% higher than the US price.
Is this an inevitable consequence of importing electronics into South Africa? A local dealer tells me the price gap is partly a consequence of buying exchange rate cover. If so, all imports should be similarly affected. But, to take just one example, local PC retailers Incredible Connection manage to sell an Acer Aspire One A110 Blue for just R1,999, when the same machine is advertised in the US at $265, or R1,959.
So who’s behind the 64%?
Apples are distributed in this country by an organisation calling themselves “Core Group”, to whom Apple appear to have granted a license to profiteer (local dealers assure me their margins are no more than 10%). So, who or what is “Core Group”? Its website (which is pretty shabby compared to the gleaming elegance one usually expects from Mac sites) tells us that:
Core Group consists of The Core Computer Business (Pty) Ltd – the distribution company of Apple Computer in SA – and Core Peripherals (Pty) Ltd, which distributes all other brands…
In 2001, the ‘Ichikowitz Group’, which previously was a minority shareholder, bought a controlling interest in Core Group and installed a new management team, and implemented a new strategy…
[Ichikowitz] operates businesses ranging from automotive import and distribution, lotteries and gaming, information technology, sporting goods and dental equipment to minerals, petroleum and other natural resources.”
Lotteries and gaming, petroleum… this does not sound like your usual computer business. And the ‘Ichikowitz Group’ (why the inverted commas?) clearly likes to keep a low profile – it has no website of its own. Dig a little furthur, and we find this: “The arms dealer who flies Zuma“, and begin to understand why. One Ivor Ichikowitz, it seems, is the brother of Core Group CEO Rodney Ichikowitz, and it turns out:
Ivor Ichikowitz, the arms and oil broker who laid on his company jet to ferry Nelson Mandela to a Jacob Zuma election rally in Transkei, has made a career from turning political connections into profit… Ichikowitz (42) made a fortune selling surplus South African armoured vehicles into Africa and the Middle East, and seems to have manoeuvred his way into Zuma’s inner circle … Ichikowitz, who also represents controversial commodities trader Glencore, partnered Majali in his 2001 bid to supply Iraqi crude to South Africa under the controversial oil-for-food programme allowing limited trade with Saddam’s Iraq … In 2005 the M&G revealed Majali, with official ANC backing, intended setting up an oil trading operation intended to benefit the ANC and Saddam’s Ba’ath party … Ichikowitz’s other main business: selling reconditioned surplus South African military equipment into Africa and the Middle East.
(None of this is mentioned in the Wikipedia entry for Ichikowitz’s company, Paramount.)
A couple of threads on a local website reflect a certain amount of public unhappiness with the ‘Apple experience’ in South Africa.
Lotteries, gaming, arms dealing in Africa, oil deals with Saddam… Way cool, Apple.
By the way, an effort to get some comment on these matters from Apple themselves – their media liaison – drew no response whatsoever.