COMPETITION TRIBUNAL
SAPS supplier fined R3.55m for price-gouging on hand sanitisers
The fine is a sharp rap on the knuckles after the companies were found guilty of overcharging the SAPS by a whopping R9.8m for the bulk supply of 10,000 25-litre containers of hand sanitisers in 2020.
A South African Police Service (SAPS) supplier, BlueCollar Occupational Health, acting in partnership with Ateltico Investments, has been fined R3.55-million by the Competition Tribunal for excessive pricing of hand sanitiser during the Covid-19 pandemic.
Read Competition Tribunal statement here.
The fine, which is jointly and severally payable by the Gauteng-based BlueCollar and KZN-based Ateltico, is a sharp rap on the knuckles after the companies were found guilty of overcharging SAPS by a whopping R9.8-million for the bulk supply of 10,000 25-litre containers of hand sanitisers in 2020.
The tribunal found that during the hard lockdown, SAPS was in desperate need of hand sanitiser for frontline staff. The tribunal described BlueCollar’s conduct as “shocking considering the social consequences in that it exploited the pandemic by charging excessively for hand sanitiser which was crucial for combating the pandemic”.
Read more in Daily Maverick: Competition Tribunal finds SAPS mask supplier guilty of price gouging
This is the second excessive pricing case successfully prosecuted by the Competition Commission in relation to public procurement processes during the pandemic. The first prosecution of price gouging, in April last year, found SAPS supplier Tsutsumani Business Enterprises guilty when it supplied the police service with face masks. Tsutsumani was fined R3.4-million, but the case is under review before the Competition Appeal Court. DM/BM
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There must have been backhanders to procurement people to enable this egregious overcharging. When will those people be required to cough up their ill-gotten gains?
Which Police Brigadier was the major shareholder in these enterprises (I imagine there was such a person), and what is the point of the story if not to name and shame?
So they overcharged by 9.8m and get a fine of 3.55m? This still seems like a good ROI to me. What am I missing?!
Agree!!!
Overcharge by R9.8 million, fine of R3.55 million. On the face of it, still a win. Where is the actual penalty?
Absolutely. Seems like a tidy profit of just under 6.5 million? Let’s all jump on this wagon.
Question: if I overcharged you by 9.8 million and get fined 3.55 million, but therefore I still made 6.35 million profit, would you consider this ruling fair?
so, once again, very few negatives experienced. Pay 30% of your ill gotten gains as a fine and still get away with around 6 million – what a good deal !
How does this work?
BlueCollar Occupational Health overcharged/price gouged the SAPS by R9.4 million for excessive pricing of hand sanitiser during the Covid-19 pandemic and you are fined a mere R2.55 million.
There is still a cool R7 million left over!
We’ve been talking about this on 702 and I was similarly astonished. Seems that this fine was the maximum the law allows. Here is what the Tribunal says: The Tribunal notes that the Act places a cap on the maximum penalty that may be imposed on a firm, and that in this case the penalty amount is significantly lower than the excess profit (i.e., the overcharge to SAPS) and notes further in its reasons: “… in terms of section 65(6) of the Competition Act, a person who has suffered loss as a result of a prohibited practice (in this case SAPS), may commence action in a civil court for damages arising out of a prohibited practice.” So, will SAPS go after the rest? They haven’t shown much appetite in the past.
Surely taxpayers can commence action for damages? In my opinion the police are likewise culpable here as they clearly didn’t follow good procurenent practice. It’s our money the police are allowing to be stolen surely?!