The Competition Tribunal has, during the subsistence of the national lockdown, continually cracked down on companies charging excessive prices for their goods. Excessive pricing is regulated in terms of the Competition Act No. 89 of 1998 (“Competition Act”) and the Consumer Protection Act No. 68 of 2008 (“Consumer Protection Act”) and firms found to be in contravention of these regulations may be liable for various fines.
On the 3rd of July 2020 the Competition Tribunal confirmed two new consent agreements relating to Covid-19 excessive pricing complaints which brought the total number of consent agreements confirmed since April of 2020 to 20. Each one of these consent agreements where concluded as a result of alleged excessive pricing of goods, such as sanitisers and face masks, used by consumers in the context of the Covid-19 pandemic.
The first consent agreement confirmed by the Competition Tribunal was with Vasilis Supermarket t/a Vasilis Cleaning Supplies (“Vasilis”) after receiving and investigating complaints from the public. The company, which is based in Bloemfontein, does not manufacture its own products, which it sells online for nationwide distribution, but rather sources these locally and internationally. The complaint against Vasilis alleged excessive prices charged for different types of surgical gloves, surgical masks and dust masks. The Competition Tribunal concluded that by significantly escalating margins on its products without any corresponding increases in costs, Vasilis contravened section 8(1)(a) of the Competition Act read together with Regulation 4 of the Consumer Protection Act regulations.
Vasilis did not admit to the contravention of the Competition Act but agreed, in terms of the consent agreement, which has been confirmed as an order of the Competition Tribunal, to desist from pricing excessively by reducing its gross profit margins on the relevant products for the duration of the state of national disaster.
Additionally, Vasilis agreed to donate essential goods in excess of to R200 000 to three charities of its selection, donate approximately R40 000 to the Solidarity Fund and develop and implement a competition law compliance program.
The second consent agreement confirmed by the Competition Tribunal was with Sanitech (a division of Waco Africa Proprietary Limited) (“Sanitech”), whom the Competition Tribunal accused of charging excessive prices for its products during the months of March and April of 2020.
As was the case with Vasilis, Sanitech did not admit to the contravention of the Competition Act read together with the Consumer Protection Act, and agreed in terms of the consent agreement, which has again been confirmed as an order of the Competition Tribunal, to donate approximately R65 000 to the Solidarity Fund; cease its excessive pricing; reduce its gross profit margin on the relevant products for the duration of the state of national disaster and develop and implement a competition law compliance program.
Any company that is unsure whether or not it is compliant with all the applicable rules and regulations in order to remain fully operational during the national lockdown should consult with the appropriate legal professionals.
Published: 08 July 2020