Durban - A consumer activist has criticised the Competition Tribunal for not taking a tougher stance against firms caught price gouging on basic food items and “ripping off” the poor during the Covid-19 State of Disaster.
This comes after the tribunal confirmed as an order, a consent agreement between the Competition Commission and KZN-based Cambridge Food Jozini, a division of Cambridge Food, and subsidiary of Massmart Holdings.
The Competition Commission said in a statement that Cambridge Food Jozini had agreed to reduce its gross profit margin on the 25kg pack of Top White maize meal for the duration of the State of Disaster.
“Cambridge Food Jozini has also agreed to donate essential goods to the Siyaphambili Qondile Home-Based Care Project 1 to the value of R24947,” the commission said.
The matter was referred to the tribunal after the commission received a complaint in April that Cambridge Food Jozini had increased its gross profit margins on the 25kg pack of Top White maize meal during April in contravention of the Competition Act and Regulation 4 of the Consumer Protection Regulations.
“The commission’s investigation established that prior to the declaration of a state of disaster, Cambridge Food Jozini was selling the 25kg Top White maize meal at far lower prices.
"It was found that in April the price was increased from about R129.99 to R159.99 without a corresponding increase in costs,” it said.
Massmart said in a statement that the firm had not been found guilty of contravening the competition regulations, but had agreed to a “no admission settlement”.
“We chose to settle to expedite a process that would otherwise have resulted in costly and protracted litigation. This was made easier by the fact that the no-admission settlement involved a contribution of R24947 to a charity in Jozini.”
Massmart said the incident had involved a store that had mistakenly applied a supplier price increase to stock delivered to the store just before the effective date of a supplier-motivated increase.
Independent consumer activist and former chairperson of the National Consumer Forum, Thami Bolani, said the donation was “a very light punishment” as the tribunal did not take a firm stand.
“That's why these things continue to happen, because these businesses expect they will come off lightly through the competition tribunal. They give a reason of some sort and pay a fine, which is small, and life continues as normal,” he said.
SA National Consumer Union vice-chairperson Clif Johnston commended the tribunal for publicising the name of the chain store.
The Mercury