Confectionery franchise leaves bad taste.
President Nelson Mandela’s name is being invoked to lure investors into producing a sugar sweet known as the Madiba Lolly. This revelation comes as Pravin Gordhan prepares to launch his controversial sugar tax on soft drinks in the April budget, aimed at reducing the nation’s sugar intake to combat the soaring incidence of diabetes and obesity among the young.
Each Madiba Lolly contains 17.5g (4.4 teaspoons) of sugar. The recommended maximum daily sugar intake is 15g, though South Africa’s children – 20% of whom are now obese or overweight – frequently pack in as much as 50-100g (12.5-25 teaspoons). A can of Coca-Cola, for example, contains 35g (8.75tsp) of the sweet poison.
Pieter van der Watt’s ARDT200 Trading CC (trading as Kandyland) and his Candy Factory Franchise shamelessly exploit the name of the world’s best-loved icon. “I’m sharing my formula of success with a few selected individuals and you can help meet the enormous demand for my Rainbow Lolly, known to all children as the Madiba Lolly!” goes the franchise maverick’s spiel on his website.
For just R490,000, a Kandyland satellite factory could knock out 41,600 Madiba Lollies a day and yield a monthly income of R252,720. “We require a factory in each region to supply the demand and it is my great pleasure to inform you that we are ready to up and roll…”
It’s all déjà vu and tediously familiar. Back in January 2007 nose87 reported that SAPS crime detectives in Cape Town were investigating complaints from 340 of Pieter van der Watt’s dissatisfied Kandyland franchise licensees. Back then Noseweek confirmed 85 of those complaints and were checking out 115 more who claimed to have lost between R60,000 and R450,000 apiece.
Two of the complainants had separately bought Kandyland Factory franchises – then priced at R450,000 – in Durban and Johannesburg and received assurances from Van der Watt that his licensed distributors would buy their sweets. However, once their factories were up and running they discovered that most of the distributor franchise holders were trying to pull out of their contracts. Both investors were stuck with mounting stocks they could not sell.
In June, Van der Watt’s internet sales pitch attracted an enthusiastic response from two investors in Boksburg: Hilton van Deventer and Johann Venter, long-time friends who were looking for “something that would give us an income” to bolster their planned early retirements from international construction.
Van Deventer and Venter were unaware of Kandyland’s bleak history. They made contact with Pieter van der Watt, who told them that the price of a factory franchise was no longer R490,000. “He kept bumping the price up, but even at R750,000 it still looked good on the figures he gave us, still a reasonable return on investment,” says Van Deventer, an old Middle East hand of 59, whose career closer to home included executive director of construction at the R6 billion Legend Golf and Safari Resort in Limpopo.
|Still going strong: Pieter van der Watt|
“We should have been more awake, but it just sounded so good,” says his investment partner Johann Venter, 58. Married with grown-up children, Venter worked with Van Deventer as project manager at the Legend resort and the two globe-trotted for years on major construction projects in Iraq, Dubai and Abu Dhabi.
Venter and Van Deventer handed over R700,000 of the franchise fee, holding back R50,000 until claimed outstanding equipment was delivered. Their newly-formed Candy Mojo company took a one-year lease on a 350m2 unit at Turf Industrial Park in Boksburg for R20,000/month, hired 18 workers (at R10.50/hour apiece) and in August began production of 16 different flavours of the Madiba Lolly. The process involved boiling 6.25kg of sugar and 3kg of glucose in water to roll out 520 lollies every seven-and-a-half minutes.
The pair say it cost around 30 cents to make each sugar-coated Madiba Lolly. The idea was that they were then bagged and sold to wholesalers at 54 cents apiece, on which Van der Watt would collect royalties of 7.5%. Retail stores would sell the lollies to young consumers at 64-80 cents.
In its five weeks of operational life Candy Mojo produced 378,000 Madiba Lollies. Today more than 340,000 of them languish unsold in the Boksburg factory unit, now closed, with its 18 workers jobless and the landlord threatening legal action for unpaid rent.
This story echoed events described 10 years ago in nose87: “Pieter van der Watt told us we’d get our product moved into the market quickly,” says Van Deventer.
“He said there was huge demand. Kandyland would purchase one third of production and there was an existing wholesale/retail network in place for purchasing and distribution of the products. But that never materialised. He took 20,000 lollies, which he never paid for. He just said that sales and marketing was our responsibility.”
|The Van Deventer and Venter sweet factory|
In vain they appealed to Van der Watt for a list of Kandyland’s wholesalers and branches.
“Due to lack of support by Pieter van der Watt in moving the product, Candy Mojo had no option but to shut the factory, due to the lack of sales which impacted cash flow and the ability to operate the franchise,” says Van Deventer in an affidavit.
“He said he had so many wholesalers on his books we wouldn’t even keep up with production,” says Johann Venter. “But we had to do cold selling. One guy took a bit on consignment, the others said ‘No, they knew the product’ and that ‘it wasn’t a good one’. It was too expensive. We had to close the factory.”
In nose87 our “Sweet Sorrow” cover story and its accompanying profile titled “The baby-faced Candy Man,” revealed how Pieter van der Watt once claimed to be a top anti-fraud police detective (he wasn’t). In the 1990s he registered a company that advertised “designer” clothes and offered franchises for them. This attracted a 1999 exposé in the Sunday Times: dozens of disgruntled franchise holders said they had been sent inferior, bottom-of-the range garments instead of a promised exclusive Tibaldi range by Stanza. Van der Watt accused the media of interfering with his income source.
By now, aware of this torrid tale, Venter and Van Deventer confronted Pieter van der Watt with the nose87 revelations. The Candy Man assured them it was a “false article, a smear campaign that had no merit” and that “the person behind it was proven to be a vindictive liar and we were exolerated (sic)”.
These days Pieter van der Watt runs his Kandyland operation from a townhouse complex in Rietvalleirand, Pretoria, while down in Cape Town, his son Stanley manages the Candy Factory in Saxenburg Park 1, Blackheath.
Our written questions to the 51-year-old Candy Man include: “Do you consider that all this sugar and glucose in your lollies is good for children’s health?”; “How many factory franchises have you sold?”; “Messrs Venter and Van Deventer say you didn’t fulfil your promise to take one third of production initially and have your distribution network help with sales. Please comment.”
Pieter van der Watt replies: “The information given to you by Johann Venter is not correct. What they fail to mention is that they refused to supply us with any of the orders we placed, nor have they taken the offers we sent them from a wholesaler who was going to clear the lines.
“They are pretending to be victimised, yet it is they who approached me as they wanted to open a factory. I told them that we do not have the need for a second factory. They convinced me that they have all the contacts and that Hilton’s son was in the industry and knew all the wholesalers; that they did their investigation and research; and that they were very confident that they could sell all the products.
“They were to supply me with stock, but apart from the first stock we received they never supplied any of our orders. The reason why we never paid for the initial stock is that it was to be deducted off the R63,000 they still owe us.”
Van der Watt did indeed place a second order – for 150,000 lollies. But the Candy Mojo partners believed this was merely a ruse to obtain the claimed outstanding R63,000. They told Van der Watt in October: “Until such time as all the outstanding equipment is delivered to us and the invoice for the 20,000 lollies already taken is paid for, we unfortunately will not agree to deliver your order.”
As for the claimed R63,000, the partners say that Pieter van der Watt owes them R68,400, for the outstanding factory equipment and additional factory opening costs.
• Kandyland’s Pieter van der Watt may be in hot water for punting his sugar-soaked product as having been “nicknamed by all children as The Madiba Lolly”. Heather Henriques, intellectual property and governance manager at the Nelson Mandela Foundation, comments: “As custodians of Mr Mandela’s names, sobriquets and image, the Nelson Mandela Foundation does not license out these registered trademarks for commercial purposes. The Nelson Mandela Foundation does exercise its legal prerogative against transgressors and, having had this case brought to our attention, we will now seek to address the matter appropriately.”
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