Body Action Gym chief executive Antonio Lozzo. (Supplied)
Independent gym, Body Action Gym, has lodged an official complaint with the Competition Commission against Discovery Vitality, Virgin Active, and Planet Fitness, on behalf of independent gym operators and smaller fitness facilities.
The gym, located in Bedfordview, said it has been experiencing anti-competitive behaviour from the companies.
“Discovery Vitality subsidises up to 75% 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,” Body Action Gym chief executive Antonio Iozzo said in a statement.
Vitality is a product of insurance company Discovery and is a behaviour change platform that combines insights from behavioural economics with clinical science insights.
“This anti-competitive and toxic 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,” said Iozzo.
Over the past 20 years, the gym industry had been monopolised by the “cartel-like behaviour” of Discovery Health, the largest medical scheme in South Africa, through their Vitality rewards programme, said Iozzo.
Discovery Health is South Africa’s leading medical scheme administrator that provides administration and managed care services to more than 3.3 million people.
Body Action Gym says over and above the financial subsidy from Discovery Vitality to Virgin Active and Planet Fitness, is collaborative pricing and marketing which traffics consumers to Virgin Active and Planet Fitness.
The official complaint to the Competition Commission was initiated in September 2021 and has progressed steadily towards its finalisation. It is before the Competition Tribunal for adjudication.
“The positive resolution of this matter will have a profound impact on the future of the gym industry and the accessibility of fitness options for the public at large,” Iozzo said.
Discovery said it takes its obligations to comply with fair business practices and competition laws very seriously. “We are disheartened by the accusations made by Body Action and find them not only to be without merit but also disingenuous and misleading,” the insurance company said in an emailed response.
Discovery told the Mail & Guardian that the Competition Commission conducted a thorough investigation of Body Action’s complaint and found it to be without merit, resulting in the non-referral of the matter.
“However, Body Action has subsequently chosen to self-refer the complaint to the Competition Tribunal. We believe that the Competition Commission’s non-referral reflects the integrity of our business practices, and we are defending the subsequent self-referral before the Competition Tribunal”.
The Competition Commission was not ready to comment on the issue in time for publication.
*This story has been changed to include Discovery’s response.
