Following President Cyril Ramaphosa’s declaration of the State of National Disaster and the subsequent 21-day nationwide lockdown to curb the spread of coronavirus, the Competition Commission has received 559 complaints of excessive pricing, an unprecedented number in its history.
While 250 of these relate to matters that fall outside the scope of the Competition Act, the rest of the complaints are against retailers and suppliers allegedly charging more for products related to Covid-19 essentials such as hand sanitisers, face masks, toilet paper and flu medication.
The complaints are under investigation, with accused retailers given 48 hours to confirm or deny allegations. The commission has issued over 100 letters to retailers and suppliers, with some responses including the difference between December/January promotional pricing and the pricing reverting back to normal in February. Some retailers, however, did not have justifications for their price increase and the commission will take action as a result.
There are also some retailers that have instituted price freeze for the duration of the lockdown.
“As of this morning, Spar Group has started sharing with the commission promotional prices for essential goods for the upcoming 3 weeks.
“Independent retailers have also been responsive, including the case of AJ Safety, a small independent retailer based in Secunda, Mpumalanga, who has taken a decision to refund the customers the balance that it overcharged for the masks following our engagements.
“AJ safety had increased the price of dust masks from approximately R5 to R25. However, following our engagement, the owner of AJ Safety submitted that he was not aware that the store manager had increased the price of dust masks. AJ Safety has since decreased the price and has started the process of refunding all those customers who bought the masks at an inflated price,” said the commission in a statement.
The Competition Act prohibits various acts of excessive pricing, price-fixing, allocation of markets and market shares and bid rigging. Any firm found to have done so faces penalties of up to 10% of its annual turnover for the first offence and up to 25% for a repeat offence. For price-fixing, allocation of markets and market shares, and bid rigging, the directors or persons with management authority who engage in such or instigate it face imprisonment of a period not exceeding 10 years.
(Compiled by Vhahangwele Nemakonde)