Covid-19: Wave of prosecutions' imminent for companies inflating prices
The Competition Commission has warned that there will be a wave of prosecutions involving companies that have excessively inflated prices.
Commissioner Tembinkosi Bonakele said the Competition Tribunal would next Friday hear a case against a company accused of excessive pricing of facial masks.
The company allegedly priced its masks at 12 times the original price.
The commission said this was the first case of excessive pricing since the start of the lockdown that it has referred to the Competition Tribunal for prosecution.
The complaint was filed with the commission on March 24.
"The commission investigated the complaints and found that during the period January 31-March 5, the company increased its prices of facial masks from R41 per box up to the highest price of R500 per box, earning during this period mark-ups in excess of 500%," said commission spokesperson Sipho Ngwema.
Ngwema said face masks fell under the category of "medical and hygiene supplies" and had been identified as essential goods for the prevention of the spread of Covid-19.
He said the commission had been inundated with hundreds of complaints from consumers about the prices of certain essential goods and other basic food items that suddenly skyrocketed.
Ngwema said there were a number of matters the commission had concluded investigating but had yet to refer to the tribunal.
These cases include:
- a hardware store that allegedly increased the price of surgical gloves over a period of a week from R99.99 to R170, with no cost increase justification;
- a pharmacy that put more than a 300% mark-up on face masks and hand sanitisers;
- a wholesaler of chicken that increased mark-ups for chicken pieces by up to 50% with no justification; and
- a supplier of face masks with 665% mark-ups.
"The commission has now gone past the stage of moral persuasion and appeals to patriotism to stop the abuse of market power by those seeking to exploit customers at a worse possible time," said Bonakele.
"The law must take its course. We will see a wave of prosecution of firms in the next coming days."