Blanket manufacturer fined R5 million for collusion in government tender

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A blanket manufacturer and blanket reseller have been issued fines of R5 million and R500 000 respectively after being found guilty of collusion in government tenders, the Competition Tribunal said on Wednesday.

Blanket manufacturer Aranda Textile Mills and blanket reseller Mzansi Blanket Supplies were found guilty of price fixing and collusive tendering relating to a 2015 National Treasury tender.

Both Aranda and Mzansi submitted bids to procure blankets and other items on behalf of several state departments including the Department of Correctional Services, South African Police Service, South African Military Health Service and Emergency Medical Services, the Tribunal said.

It said it had studied the evidence submitted by both companies and that the "only reasonable inference that can be drawn is that Aranda and Mzansi had engaged in collusive bidding".

"They adopted a pricing strategy through which they could hedge their bets and ensure that only either or both won the tender, and not the other bidders," the Tribunal said.

It added that Aranda "elected to engage in unfair pricing methods towards potential bidders thus defeating one of the objectives of the tender namely the promotion of small, black-owned businesses."

It ordered Aranda to pay up R5 million and Mzansi to pay R500 000.

However, it added, there were mitigating factors, namely that it appeared to be a first offence for both respondents, and Aranda "demonstrated that  it was committed to promoting local production".

Aranda and Msanzi Blanket Supplies could not be reached for comment. Aranda has previously denied wrongdoing.

Fin24 also reached out to National Treasury for a response to the Tribunal's ruling. Should it be forthcoming, this story will be updated.

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