Food Lover's store admits to charging excessive price for raw ginger

14 July 2020 - 15:58 By Ernest Mabuza
The Competition Tribunal has confirmed a consent agreement reached between the Competition Commission and Food Lovers Holdings whereby the firm agreed to stop excessive pricing for ginger sold at one of its stores.
The Competition Tribunal has confirmed a consent agreement reached between the Competition Commission and Food Lovers Holdings whereby the firm agreed to stop excessive pricing for ginger sold at one of its stores.
Image: 123RF/Asawin Klabma

The Competition Tribunal has confirmed a consent agreement reached between the Competition Commission and Food Lovers Holdings whereby the firm agreed to stop excessive pricing for ginger sold at one of its stores.

It has agreed to donate essential goods worth R18,579 to an old age home in Randfontein.

While just over 20 consent agreements the commission has reached with companies in relation to excessive pricing have been for sanitisers, gloves and face masks since the coronavirus pandemic, the latest agreement is the first in respect of excessive pricing for a food product.

The commission received information around May 14 about allegedly excessive prices being charged per kilogram of raw ginger at the Food Lover's Market branches in Hillfox and Westgate in Gauteng.

The commission found - and Food Lover’s Market admitted - that the average mark-up and gross profit margins for raw ginger in May 2020 at its Westgate store were unreasonably high for an essential product during the state of national disaster, when compared to the mark-up and gross profit margin in the preceding period.

This amounted to a contravention of the Competition Act.

The commission said ginger was food viewed as essential in terms of the consumer protection regulations.

In terms of the consent agreement that was made an order of the tribunal, the company agreed to, among other things, immediately stop the excessive pricing conduct that was reported.

It also agreed to immediately reduce Food Lover’s gross profit margin on raw ginger at the Westgate store to an agreed maximum percentage for the duration of the state of the national disaster.

The company also agreed to donate essential goods worth R18,579 to Mohlakeng Old Age Home in Randfontein.

The amount was based on, among others, the additional income derived by Food Lover's Market as a result of the significant increase in margins on raw ginger in May.

Three other companies also reached settlement agreements with the commission in relation to excessive pricing of masks and hand sanitisers.

Steelmate, a company in Boksburg, Ekurhuleni, agreed to donate R5,662 to the Solidarity Fund after being accused by the commission of excessively pricing dust face masks.

The company did not admit that its conduct constituted excessive pricing. However, it agreed to settle the matter by making the donation and reducing its gross profit margin on the sale of dust face masks to an agreed maximum percentage for the duration of the state of national disaster.

Umhlanga Medisport Pharmacy in KZN, in an agreement with the commission, agreed to donate hand sanitisers worth R20,000 to a child support charity in the area.

The commission found that Medisport’s mark-ups on face masks and hand sanitisers for March and April were unreasonable.

The tribunal also confirmed a consent agreement between the commission and Stelkor Pharmacy, a Stellenbosch community pharmacy accused of charging excessive prices for face masks in April.

The pharmacy agreed to pay R12,500 to the Solidarity Fund and also to immediately stop the excessive pricing, as described in the consent agreement.


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