14 - The Commonwealth III: South Africa

Summary

The background and the market

South Africa provides an interesting case of a market in which Glaxo Laboratories made a considerable effort in the 1940s and 1950s, largely at the instigation of Jephcott and under the influence of his loyalty to the Commonwealth Dominions. At that time British multinational investment in South Africa was particularly successful, but political factors and other local characteristics resulted in a gradual diminution of the South African subsidiary's role within the group in the 1960s. The partiality which Jephcott felt for the country, the company and certain of the latter's executives was an important influence in the period before then.

The immense geographical size of South Africa posed constant problems for promotional work and supply throughout this period; moreover, the local market was both complex and idiosyncratic. South Africa's population had risen from about 8.5 million in 1930 to 11.26 million in 1945, and then to 13.7 million in 1955 and 14.9 million in 1960; but in practice this did not represent the size of the market available to Glaxo, for it included a large black population, which could not afford modern pharmaceuticals except when prescribed through state hospitals. As late as 1962 a South African government commission found it impossible to establish the actual total expenditure on medicines in South Africa, because of the confusing patterns of local returns and the fact that 70 per cent of medicines in local use, especially the more expensive types, were imported.