SAPS hand sanitiser supplier referred to Competition Tribunal for excessive pricing

The Competition Commission has referred a Tshwane-based company that charged the SAPS excessive prices in March 2020 for the supply of bulk hand sanitisers to the Competition Tribunal for prosecution.

This is the third Covid-19-related public procurement case referred to the tribunal, the  commission said on Thursday.

The referral followed the conclusion of the commission's investigation into a complaint lodged by the police, commission spokesperson Siyabulela Makunga said.

“This [was] for its procurement of personal protective equipment (PPE) during the national state of disaster. The commission has found Red Roses Africa, previously registered as Mainstreet 669, charged excessive prices to SAPS when responding to a request for a quote for the supply of bulk hand sanitisers in 25-litre containers.

“Red Roses was subsequently appointed and supplied SAPS with 90,000 25-litre containers of hand sanitisers at a price of R4,700 per container, with a gross markup of 236%.

The commission said its investigation found the price Red Roses charged SAPS was excessive and contravened the Competition Act.

It also found Red Roses’ price did not correspond with the increase in the cost of providing the sanitiser.

“The excessive price was exploitive and directed at taking advantage of SAPS at a time when PPEs, and particularly hand sanitisers, were in high demand,” competition commissioner Doris Tshepe said.

The commission said two other cases referred to the tribunal were successfully prosecuted and their outcomes determined by the tribunal.

“The first prosecution of price gouging in relation to public procurement relates to the April 2022 matter where another SAPS supplier, Tsutsumani Business Enterprises, was found guilty of price gouging in its supply of face masks in 2020.

“Tsutsumani was fined R3.4m in administrative penalties by the tribunal. The Tsutsumani matter is under review before the Competition Appeal Court.

“In April this year, BlueCollar Occupational Health, acting on behalf of and/or within its partnership with Atletico Investments, was found guilty of excessive pricing of hand sanitiser during the pandemic.

“The tribunal also imposed an administrative penalty of R3.5m for overcharging SAPS for the bulk supply of 10,000 25-litre containers of hand sanitisers in 2020.”

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