Sunningdale shopper spots price hikes
Consumers contribute to price hikes by participating in panic-buying.
SINCE the declaration of the State of National Disaster, The Competition Commission of South Africa (CCSA) has received more than 550 complaints about price hikes – an unprecedented number.
Among the concerns raised was the spiraling prices of agricultural products such as wheat, white maize, sunflower seeds, carrots, onions and tomatoes, although, the majority of the complaints related to hand sanitiser and face masks, followed by toilet paper and flu medication.
Sunningdale resident, Alwene Els said she had noticed price hikes in some supermarkets which were worrying in the face of uncertain times.
“As we are property practitioners, we only get paid when people move into their properties, normally after the first of every month. I didn’t receive any income for this month and probably won’t for next month. Expecting an income at the end of the month, I spent all my money on food last month and I am sitting with a huge financial problem now,” she said.
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Head of communications for the CCSA, Sipho Ngwema said ‘price gouging’ is defined as excessive price increases that reaches an unfair level.
“This is done without regard to any changes in costs of supply of the product in question as the retailer or seller looks to profiteer from the crisis. As a result, gross margins for retailers or their suppliers will increase materially,” he said.
However, Ngwema noted that consumers can contribute to price hikes if they participate in panic-buying.
“This is the practice of obtaining and holding resources in greater quantities than one needs for immediate use. This can create artificial shortages of those items. In turn, immoral businesses can see this as an opportunity to milk the consumer by raising the prices unreasonably and excessively,” he added.
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The Competition Act prohibits excessive pricing and collusive behaviour by suppliers and retailers.
“The penalties for such offences are severe, including a 10 per cent of the firm’s annual turnover for a first time offence and 25 per cent of annual turnover for a repeat offence. For collusive behaviour, the directors of companies which engage in such acts face potential imprisonment for a period of up to 10 years,” said Ngwema.
The commission has issued over 100 such letters to national retailers, suppliers and independent retailers. Consumers can report price hikes by calling, toll-free number, 0800 014 880.
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