Competition Commission hears 1st ‘COVID-19 excessive pricing’ case

The Competition Commission’s first COVID- 19 related excessive pricing case is being heard in Pretoria by the Competition Tribunal. The case against Babelegi Workwear and Industrial Supplies is being heard on an urgent basis.

Babelegi is alleged to have contravened the Competition Act charging excessive prices for face masks. If found guilty, the company could pay an administrative penalty equal to 10% of its turnover.

Senior Advocate representing Babelegi Greta Engelbrecht argues that the commission filed a referral based on the conduct of the company before the lockdown started and not after.

“The cations of Babelegi did not occur during the period of national disaster. The national disaster was only declared on 15th March, regulations were only published on 19th March. So, the short answer to the question, ‘do the COVID- 19 rules apply?’ The answer is no. But the commission says, ‘yes, we are still entitled to hear this case as a mater of urgency.”

Second consent agreement

Meanwhile, the Competition Tribunal has approved a second consent agreement relating to the COVID-19 excessive pricing.

A Gauteng hardware store was found to have charged its customers excessive prices for surgical gloves during the State of National Disaster and lockdown period.

Maine Hardware, which is based in Johannesburg, must also reduce its mark-up on surgical gloves to 10% during the reminder of the pandemic and immediately stop its excessive pricing. It must also refund all customers who bought boxes of gloves.

Dischem price hiking case

Pharmaceutical retail chain, Dischem, is to be charged for contravening lockdown regulations by inflating prices on some items by up to 261% during the COVID-19 pandemic.

The Competition Commission says it has referred the case to the Competition Tribunal for prosecution after it found that Dischem has charged excessive prices on essential items such as surgical masks.

The commission has asked the Tribunal to impose a maximum penalty against Dischem.

Dischem have now hiked their prices.

5masks in one packet was R25,
Now 1mask in one packet is R20.
???@dischem 200% profit@CyrilRamaphosa you warned this suppliers but nothing is happening instead they are worse. pic.twitter.com/1HuzXSeAiE

— BLACKS ADVOCATE (@DRCOMMENT1) April 18, 2020

Over 500 excessive pricing complaints

Tembinkosi Bonakele from the Competition Commission says since President Cyril Ramaphosa’s declaration of a National State Of Disaster and the subsequent lockdown, the Competition Commission has received more than 500 complaints related to excessive pricing.

Some retailers and suppliers have been increasing prices of hand sanitisers, face masks, toilet paper and even essentials such as basic foods. The complaints are currently under investigation.

Bonakele elaborates further in the video below: