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Read the Article below and Answer ALL the Questions that follow Battle of the gyms as Virgin Active faces competition authority complaint A small South
Read the Article below and Answer ALL the Questions that follow Battle of the gyms as Virgin Active faces competition authority complaint A small South Africa gym owners complaint at the Competition Commission may negatively impact the overall market valuation of South Africas biggest gym African News AgencyANA reports. While Virgin Actives main shareholder Brait prepares the multinational gym group for listing, a small South Africa gym owners complaint at the Competition Commission may negatively impact the overall market valuation of South Africas biggest gym. Body Action Gyms complaint of anticompetitive behaviour against Discovery Vitality and the two biggest gym groups Virgin Active and Planet Fitness, on behalf of independent and smaller fitness facilities, had been referred to the Competition Tribunal, although an outcome might only be in eight months, Body Action CEO Antonio Iozzo said on Friday. He said in a telephone interview their action was initiated in September after Body Action Gym lodged a complaint with the Competition Commission. Discovery Vitality subsidises up to of their members gym membership fees when they sign up with Virgin Active or Planet Fitness, while denying any other competing gym facility the opportunity to participate in this lucrative arrangement, said Iozzo. It is not the first time Discovery Vitality, Virgin Active and Planet Fitness have faced legal action by smaller independent gym operators. In FitSA a notforprofit group representing small gyms outside the Virgin and Planet Fitness brands, was unsuccessful in a complaint lodged at the Competition Tribunal against Discovery, the two gym groups and other medical aids. The crux of their complaint at the time was also that Discovery, through its Vitality programme, subsidises membership to Virgin and Planet Fitness and, in so doing, makes all other gyms uncompetitive. Iozzo said also Discovery Vitality, Virgin Active and Planet Fitness all marketed the same benefits and shared marketing costs between them. He said while he had a Vitality benefit kiosk in his own gym, he was not able to get access to the Vitality subsidy that Virgin Active and Planet Fitness benefit from. These gyms get up to of their income from this subsidy, he said. This anticompetitive and closed member alliance has distorted competition, created substantial barriers to entry, and caused immense harm to the gym industry. Gym operators are simply unable to compete against the Discovery Vitality subsidy, he said. Iozzo said if he was successful in his action against the two national gyms and Discovery Vitality, the fact that it might need to provide the subsidy to other smaller gyms, and improve the competitiveness of those gyms, would likely impact the overall valuation of Virgin Active by the market once it listed. Body Action Gyms complaint aims to address this unfair business practice which stifles competition and has resulted in gym closures, job losses and the further consolidation of power within the industry, he said. Attempts to obtain further comment from Virgin Active proved fruitless on Friday. Virgin is by far the largest gym group in South Africa, with about active gyms. Discovery is in turn, the largest open medical aid scheme, with million members. Statement from Discovery On Monday, after our story was published, Discovery provided BR with a statement.
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