Where there’s a crisis, you’ll inevitably find people who are willing to take their chances, and exploit it for financial gain.
The COVID-19 pandemic created a new market for masks, gloves, and other protective or preventative gear formerly the domain of the healthcare sector.
As people scrambled to get their hands on these items, their prices started to rise.
(As an aside, please leave the medical-grade masks and gloves for healthcare workers. You can make your own fabric mask, or order one online.)
The latest company to go under the microscope for allegedly inflating prices is Dis-Chem, reports SowetanLIVE.
A Competition Commission probe has found that pharmaceutical giant Dis-Chem charged excessive prices on essential goods, with costs on some products skyrocketing by up to 200%.
The finding has seen the commission referring the case to the Competition Tribunal for prosecution for excessive pricing during the State of National Disaster as declared by President Cyril Ramaphosa.
The commission has said that the inflated prices of hygiene goods and essential items, like surgical face masks, has been detrimental to customers who can’t afford to stock up on pricier items.
The price hikes are therefore in contravention of Section 8(1)(a) of the Competition Act.
For surgical face mask blue 50PC, the average price was inflated from R43.47 (excl VAT) per unit (50 masks) in February 2020 to R156.95 (excl VAT) per unit (50 masks) in March 2020, a price increase of 261%,” stated the commission’s statement.
“The surgical face masks 5PC, the average price increased from R13.27 (excl VAT) per unit (5 masks) in February 2020 to R19.03 (excl VAT) per unit (5 masks) in March 2020, a price increase of 43%.”
Trade and industry minister Ebrahim Patel announced last month that government would not take unnecessary price manipulation and inflation lightly.
The price hikes were exposed after a series of complaints from consumers. The commission found that Dis-Chem had been selling masks at a significantly reduced rate before the national state of disaster was declared.
“People who sell these essential products ought to appreciate that these are literally life-saving items right now. 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,” said the Competition Commission’s head Tembinkosi Bonakele.
The commission has asked that the Competition Tribunal impose the maximum penalty against the company.
Dis-Chem intends opposing the decision to refer it to the Competition Tribunal for prosecution.
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