Aranda Textile Mills (Pty) Ltd and Mzansi Blanket Supplies (Pty) Ltd v Competition Commission of South Africa

National Treasury issued Tender RT26-2015 for the supply of, inter alia, blankets to the State. Aranda Textile Mills (Pty) Ltd, the only local manufacturer capable of meeting the specifications, and Mzansi Blanket Supplies (Pty) Ltd, a distributor that sourced blankets from Aranda, both submitted bids. Aranda’s bid price was lower, but Mzansi was awarded the tender due to superior B-BBEE credentials. The Competition Commission alleged that Aranda and Mzansi colluded by coordinating their bids, relying primarily on the fact that Mzansi’s bid prices reflected a consistent 7.25% mark-up on Aranda’s prices, and on communications between them during the bid preparation stage. The Tribunal found that this constituted price fixing and collusive tendering in contravention of s 4(1)(b)(i) and (iii) of the Competition Act. Aranda and Mzansi appealed, denying any agreement or concerted practice and contending that their communications were consistent with a lawful manufacturer–distributor relationship.

The appeal was upheld and the Tribunal’s finding that Aranda and Mzansi contravened s 4(1)(b)(i) and (iii) of the Competition Act was set aside.

The case clarifies the limits of inferential reasoning in South African competition law, particularly in cartel cases involving per se prohibitions. It emphasises the need for proper characterisation of relationships (horizontal versus vertical), rigorous evidential analysis, and adherence to constitutional standards of fairness when relying on circumstantial evidence.