Citizen Reporter
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2 minute read
29 Apr 2022
4:06 pm

SAPS face mask supplier found guilty of excessive pricing, fined R3.4 million

Citizen Reporter

Tsutsumani was accused of charging the Saps an excessive price for 500 000 3-ply surgical face masks in April 2020.

Picture: iStock

The Competition Tribunal found that Tsutsumani Business Enterprises CC excessively charged the South African Police Service (SAPS) for the urgent supply of 500 000 face masks during Covid-19 in April 2022.

Saps ordered the 3-ply surgical masks from the enterprise at the peak of the outbreak of the pandemic.

An order by the tribunal not only found Tsutsumani guilty but also fined them an administrative penalty of R3.4 million.

The order cited the money totalling R3 441 689.10 to be paid in 30 working days.

Tribunal’s determinations

The Tribunal concluded that Tsutsumani exploited its dominance in the market during that period for the emergency acquisition of face masks.

The enterprise was registered on National Treasury’s Central Supplier Database met the requirements of Saps’ request for quotations to urgently supply them with masks in a short period of time.

“Tsutsumani accordingly acted in contravention of section 8(1)(a) of the Act, read with Regulation 4 of Consumer Protection Regulations as alleged by the Competition Commission in its complaint referral,” read the statement.

First excessive pricing case

According to the Tribunal, this is the first ever case to be taken to court for excessive pricing in the context of tender process during the pandemic.

It is also the first case to be resolved under the Consumer Protection Regulations.

“This is because while the Tribunal and the Competition Appeal Court considered excessive pricing in the context of a national disaster in the Babelegi decisions, the Consumer Protection Regulations were not yet in force at the time of Babelegi’s conduct,” the statement read.

Background

The enterprise was accused by the commission of excessive charges during the period 5 April to 29 April 2020.

Tsutsunami was one of the various suppliers to provide the personal protective equipment (PPE) to the Saps after they issued a request for quotation (RFQ).

SAPS had to pay the amount as the National State of Disaster was declared and they needed nine million masks per month by the officers who were at the frontline during lockdown.

Tsutsunami denied the excessive pricing allegations.

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