KZN food store told to donate essential goods for hiking price of maize meal

Cambridge Food in Jozini, northern KwaZulu-Natal, has been ordered to donate to a charity organisation for charging excessive prices for maize meal.

The Competition Tribunal has confirmed as an order a consent agreement between the Competition Commission and the company.

In terms of the order, Cambridge Food Jozini has agreed to reduce its gross profit margin on the 25kg Top White maize meal for the duration of the state of the national disaster, the commission said.

The store also agreed to donate essential goods to the Siyaphambili Qondile home-based care project 1, to the value of R24,947.

“This follows a complaint received in April indicating that Cambridge Food Jozini had increased its gross profit margins on the 25kg Top White maize meal during April in contravention of the Competition Act, read together with regulation 4 of the Consumer Protection Regulations,” said the commission.

“The commission’s investigation established that before the declaration of a national state of disaster, Cambridge Food Jozini was selling the 25kg Top White maize meal at far lower prices.

“It was found that in April 2020 the price of the 25kg Top White maize meal was increased by Cambridge Food Jozini from about R129.99 to R159.99 without a corresponding increase in costs.”

The commission said it has to date referred and settled 30 Covid-19 related cases valued at over R15m, of which more than R5m has been donated to the Solidarity Fund.

“There have also been donations of essential goods to affected communities to the total value of R551,886.70,” it said.

“The commission urges firms to comply with the Competition Act during the state of national disaster and desist from exploiting consumers.”

In response, Massmart’s corporate affairs executive Brian Leroni said: “It was a genuine mistake.

“The incident involved a single store in Jozini mistakenly applying a supplier-motivated price adjustment to existing stock in the store. No other stores took this action.”

Leroni was at pains to point out that Cambridge Food had not been found guilty of contravening competition regulations.

“We elected to enter into a no-admission settlement agreement, given the cost associated with a protracted legal action,” he said. 

“Our decision was made easier by the agreement to make a charitable donation to an NGO in Jozini.”

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