Cape Town - The Competition Tribunal has fined BlueCollar Occupational Health and its partner, Atletico Investments, more than R3.5 million in penalties following a guilty finding for overcharging the SAPS for hand sanitiser during the national state of disaster in 2020.
The outcome follows a complaint by the Competition Commission of alleged irregular practices by Blue Collar during Covid-19.
The tribunal’s finding was circulated yesterday.
“In terms of the tribunal’s order, BlueCollar and Atletico are jointly and severally liable to pay an administrative penalty of R3 550 000 within 30 business days of the date of the order, the one paying the other to be absolved.
“Although BlueCollar is a first-time offender… the tribunal finds that the aggravating factors, specifically the exploitative conduct of BlueCollar, far outweigh any mitigation. BlueCollar’s conduct is particularly egregious when one considers its social consequences,” it said.
The matter was heard by members Mondo Mazwai, Andreas Wessels and Andiswa Ndoni.
In a statement issued by the tribunal on Monday, it said: “Blue Collar supplied hand sanitiser to SAPS from April 5 to 29, 2020. When supplying the hand sanitiser to SAPS, BlueCollar did so as a so-called trader or reseller.
“It bought the sanitiser stock from third party suppliers and supplied it to the SAPS (without adding any value to the product itself).
“BlueCollar’s usual business activities relate to the provision of occupational health services, including to SAPS, and is registered on National Treasury’s central supplier database,” it said.
The Competition Commission said yesterday that it was pleased with the outcome.
Spokesperson Siyabulela Makunga said: “The tribunal found that during the hard lockdown, the SAPS was in desperate need of hand sanitiser for its members who were on the front lines of efforts aimed at containing the escalation of the pandemic and enforcing the lockdown restrictions nationally. Hand sanitiser became crucial in mitigating the spread of Covid-19.
“In the reasons for its decision, 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.
“In the order handed down on April 3, the tribunal also imposed an administrative penalty of R3 550 000, jointly and severally, on Gauteng-based BlueCollar and KZN-based Ateltico for overcharging the SAPS to the amount of R9.8 million for the bulk supply of 10 000 25 litre containers of hand sanitisers in 2020,” Makunga said.
According to facts, the amount charged for the supply of the hand sanitiser to SAPS was more than 40% and its mark-up was more than 70%.
“Having established a prima facie excessive price, the onus shifts to BlueCollar, but it was not able to provide any cost justifications to show that its price charged to SAPS was reasonable,” the tribunal said.
The final outcome was expected to be released next week.