Company to pay R10.9m for inflating mask prices during Covid-19 disaster
A distributor of face masks and other personal protective equipment (PPE) has agreed to pay R10.9m for inflating its gross profit margins on essential hygiene products during the Covid-19 disaster period, the Competition Commission said on Wednesday.
The commission said it has referred to the Competition Tribunal, for confirmation as an order, a consent agreement it reached with Matus, which admitted to inflating the prices of dust masks during this period.
In terms of the agreement, Matus will pay an administrative penalty of R5.9m. The company will also contribute R5m to the Solidarity Fund for Covid-19.
Matus — a company with offices in Johannesburg, Cape Town and Durban and satellite branches in Port Elizabeth and Mbombela — supplies and distributes personal protection equipment such as dust masks, overalls, hand sanitisers, fire protective gear and first-aid kits. These are procured from local and overseas manufacturers.
In terms of the agreement, Matus will with immediate effect reduce its gross profit margin on dust masks to acceptable levels for the duration of the national state of disaster.
The commission said the company undertook for the duration of the disaster to ensure that its gross profit margins for essential products would not increase above what was applicable on February 16 for as long as the products remain essential in terms of the consumer protection regulations.
The sanction follows an investigation conducted by the commission after it obtained information against Matus in relation to inflated prices of dust masks.
“Subsequently, the commission found that Matus unreasonably increased the prices of dust masks, resulting in excessively inflated gross profit margins, in contravention of the Competition Act and regulation 4 of consumer protection regulations,” said the commission.