Covid-19 lockdown: Gauteng tops list of 1 500 complaints and tip-offs received by Competition Commission
Most objections centred around excessive pricing of essentials such as basic food products, masks and sanitisers.
The Competition Commission has received over 1 500 complaints or tip-offs related to excessive pricing of basic food products, masks and sanitisers since the start of the Covid-19 lockdown. Most of these, it said, have been from Gauteng.
This was announced in a statement released by the Competition Commission Commissioner, Tembinkosi Bonakele, on 29 May.
The Commission has referred four investigations to the Competition Tribunal, including the investigation of Dis-Chem Group and Babelegi Supplies, and is awaiting judgments from the Tribunal.
The Commission encouraged firms to reach settlements in order to speed up the processing of excessive pricing cases. In most settlements, firms had undertaken to correct prices/margins and make a donation. The total amount of settlements equals R12 854 694,00.
These have been in the form of penalties levied against the firms, donations to the Solidarity Fund and Public Interest Organisations (PIOs) such as old age homes, local charities, and police stations, broken down as follows:
− R7 479 542,00 – penalties levied against respondent firms.
− R5 316 990,00 – donations to the Solidarity Fund.
− R58 162,00 – donations to PIOs.
The Commission has also encouraged firms which were found to have contravened the Act to take corrective action to prices or margins to what it regards as competitive levels, up to 20%. To date, it said, 35 firms are in various stages of settlement.
“We would like to thank all our stakeholders, particularly consumers and members of society who have been active in bringing these matters to our attention, and business which has been largely cooperative during our investigations,” said Commissioner Bonakele.
The Commission is also monitoring food market pricing to understand retail level inflation and the need for enforcement action.
“We expect price increases in some staple foods such as bread and flour due to the rand depreciation which has resulted in price increases for imported crops such as wheat (25%) and rice (30%),” said the Commissioner. The domestic price of maize has increased due to season-end shortages but will drop significantly as the new bumper crop comes in late May.
Fresh produce was initially impacted by panic buying of staples (onions, potatoes, tomatoes) leading to some price spikes. However, the drop in demand from restaurants and constrained consumers has seen prices steadily fall on most fresh produce since lockdown as supply outstrips demand.
In non-Covid-19 related work, the Commission is assessing the acquisition of Mobile Network Operator (MNO) Cell C, silo storage provider Suidwes, and a coal mining company South32.
The Commission has concluded settlements with MNOs, including Vodacom and MTN, which undertook to reduce the cost of data by up to 30%. The MNOs have also undertaken to provide lifeline data and zero-rating for public interest purposes.
Regulations restricting the abuse of power by dominant suppliers have been published and a settlement has been reached which would see large retail stores, including Shoprite Holdings phase out exclusivity clauses in their leases. These developments will enable competition from small business and independent retailers.
The Commission will continue to prioritise Covid-19 matters and refer several more cases for prosecution, including settlements and consent orders with respondent firms. Priority will be given to merger regulations and/or block exemptions in sectors of the economy which have been severely impacted by the pandemic.
The Commission will also work closely with government and business to provide advice or advocacy regarding specific proposed interventions for economic recovery.
“There is increased need for coordination with international counterparts to coordinate our responses to the pandemic and economic interventions. We emphasise that Competition Policy should be prioritised as a key tool towards economic recovery, post-pandemic,” said Commissioner Bonakele.
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