The Competition Tribunal has confirmed, as an order, a consent agreement concluded between Durban-based distributor of industrial solvents Swift Chemicals and the Competition Commission in relation to an investigation into alleged excessive pricing in the context of Covid-19.
In April, the commission received information regarding alleged excessive prices charged by Swift Chemicals for, besides other products, alcohol-based products including Isopropanol (IPA) and n-Propanol (NPA).
The commission conducted an investigation and believes Swift Chemicals derived R739 423.49 in excess profits from charging excessive prices on IPA and NPA between March and April.
Swift Chemicals is a distributor of industrial solvents, including IPA and NPA, which are intermediate inputs into sanitisers and disinfectants – essential products as listed in the Consumer Protection Regulations.
Although the company has agreed to pay an administrative penalty of R300 000, 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 to avoid protracted litigation and costs.
In terms of the agreement, Swift chemicals agrees to, besides other actions, immediately desist and refrain from excessive pricing conduct and 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.
In addition, the company agrees to 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 Competition Act.
In particular, such compliance programme will include a mechanism for the monitoring and detection of any contravention of the Competition Act.
Further, in addition to its undertakings as contained in the consent agreement, Swift Chemicals has, between March and August, made donations to several organisations and charities, including R300 000 to the Solidarity Fund, R100 000 to the Nelson Mandela Fund and R113 624 to Wentworth Hospital for the purchase of a specialised life-saving ventilator and other consumables. It has also donated 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.