Major suppliers of face masks prosecuted for exorbitant prices
CAPE TOWN – The Competition Commission has referred two major suppliers to the Competition Tribunal for prosecution for allegedly charging excessive prices on face masks.
Sicuro Safety and Hennox Supplies have been charged with the contravention of Section 8(1)(a) the Competition Act, read with Regulation 4 of the Consumer Protection Regulations.
This follows the Commission’s investigation which found that the prices charged by the by Sicuro and Hennox for the Filtering Face Piece 1 (FFP1) mask increased astronomically by more than 969.07 percent and 956 percent, respectively.
The Commission said on Tuesday that the two companies had not furnished it with any reasonable explanation for such excessive price increases.
The two cases follow the Commission’s earlier prosecutions in respect of excessive prices charged for face masks against Babelegi Workwear and Industrial Supplies and Dis-Chem Pharmacies.
In Babelegi a price increase of 1241 percent was levied, while in Dis-Chem the price increase for face masks increased by as much as 317 percent.
The Commission contends that Sicuro’s and Hennox’s pricing was a direct reaction to the Covid-19 pandemic and its unprecedented impact on the world in general and South Africa in particular.
The Commission said, in order to address this concern, it had asked the Tribunal to issue an interdict prohibiting the firms from continuing with any excessive pricing conduct, together with such pricing order as may be necessary to remedy this conduct.
Meanwhile, a pharmacy based in KwaZulu-Natal has admitted to excessive pricing of face masks in a consent agreement with the Competition Commission.
The Commission received information relating to the inflated prices of face masks by the Mandini Pharmacy in March, according to a report by SAnews.gov.za.
“A Commission investigation found that Mandini Pharmacy ordered face masks from a supplier with the intention to resell to its customers. It did not sell face masks before March 2020 but decided to source face masks due to the sudden demand and panic-buying brought on by the state of national disaster,” the Commission said.
Mandini pharmacy admitted that it had engaged in the conduct of excessive pricing which amounts to a contravention of section 8(1)(a) of the Act.
This is the Commission’s seventh consent agreement – relating to alleged excessive pricing in the context of COVID-19 – approved as an order of the Tribunal. The consent agreement has been confirmed as an order of the Tribunal.