DURBAN - The competition Commission yesterday laid charges of excessive pricing against Dis-Chem, one of South Africa's top pharmaceutical groups.
The commission laid the charges with the Competition Tribunal for a maximum penalty after saying that its investigation found that Dis-Chem charged customers excessively for essential hygiene goods during the State of National Disaster.
It asked the tribunal to prosecute the pharmaceutical company for contravening Section 8(1)(a) of the Competition Act.
The commission said prior to the state of disaster, Dis-Chem sold surgical face masks blue 50PC, surgical face masks 5PC and surgical face masks in folio dress blue at far lower prices.
It said the average price for the 50PC masks was inflated 261percent from R43.47 in February to R156.95 in March.
Competition commissioner Tembinkosi Bonakele slammed Dis-Chem for the violation.
“People who sell these essential products ought to appreciate that these are literally life-saving items right now,” Bonakele said. “They shouldn't be exploitative and take advantage of cash-strapped consumers during the worst time in our history. We will spare no effort in protecting the consumer.”
Last month, Trade and Industry Minister Ebrahim Patel said the government would take companies to task if found guilty of price manipulation, unfair increases in the cost of basic goods and anti-competitive behaviour.
Dis-Chem yesterday disputed the claims.
“Dis-Chem Pharmacies acknowledges that the Competition Commission has brought charges against it relating to excessive pricing. Dis-Chem categorically denies these allegations. It confirms that its pricing is within regulated guidelines and states it does not engage in price-gouging or excessive price-fixing. It is examining the specific charges and allegations and will respond in due course.”
However, the commission said Dis-Chem also increased the price of 5PC surgical face masks by 43percent to R19.03 per unit of 5 masks in March from R13.27 in February.
It also said Dis-Chem’s input costs on the masks’ foliodress blue did not increase, but its gross profit margins inflated from 20percent in February to 45percent in March.
The commission said it received complaints against several retail stores owned by Dis-Chem for engaging in excessive pricing of face masks, specifically dusk and surgical masks.