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TRIBUNAL APPROVES CONSENT AGREEMENT BETWEEN COMMISSION AND INDUSTRIAL SOLVENTS DISTRIBUTOR
The Competition Tribunal (the Tribunal) has confirmed, as an order, a consent agreement concluded between a Durban-based distributor of industrial solvents and the Competition Commission (the Commission), in relation to alleged excessive pricing in the context of Covid-19.
Swift Chemicals (Pty) Ltd is a distributor of industrial solvents, including isopropanol (IPA) and n-propanol (NPA) which are intermediate inputs into sanitiser and disinfectants – essential products as listed in the Consumer Protection Regulations (the Regulations).
The Commission accused the company of charging excessive prices for IPA and NPA between March and April 2020, in contravention of section 8(1)(a) of the Competition Act (the Act) read together with regulation 4 of the Regulations.
Although Swift Chemicals has agreed to pay an administrative penalty of R300 000 (three hundred thousand Rand), it does not admit that its conduct – as set out in the consent agreement – constitutes excessive pricing. Swift Chemicals states that it concluded the consent agreement in order to avoid protracted litigation and costs.
Future conduct
In terms of the agreement Swift chemicals agrees to, among others:
- immediately desist and refrain from excessive pricing conduct;
- ensure its gross profit margins on IPA and NPA do not exceed an agreed maximum percentage with immediate effect and for the duration of the state of national disaster; and
- develop, implement and monitor a competition law compliance programme incorporating corporate governance designed to ensure that its employees, management, directors and agents do not engage in future contraventions of the Act. In particular, such compliance programme will include a mechanism for the monitoring and detection of any contravention of the Act.
Donations
In addition to its undertakings as contained in the consent agreement, Swift Chemicals has, between March and August 2020, made donations to the following organisations and charities:
- R300 000 to the Solidarity Fund;
- R100 000 to the Nelson Mandela Fund;
- R113 624 to Wentworth Hospital for the purchase of a specialised life saving ventilator and other consumables;
- R76 506.50 towards food hampers; and
- R63 509 towards feeding schemes.
The donations made by Swift Chemicals were among a range of factors considered by the Commission in determining the administrative penalty.
Background
In April 2020, the Commission received information regarding alleged excessive prices charged by Swift Chemicals for, inter alia, IPA and NPA.
The Commission conducted an investigation and found that Swift Chemicals derived R739 423.49 as excess profits from charging excessive prices on IPA and NPA between March and April 2020.
A non-confidential copy of the consent agreement will be made available on the Tribunal’s website at www.comptrib.co.za in due course.
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