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COVID-19: Excessive pricing – A total of 30 consent agreements confirmed by the South African Competition Tribunal

17 July 2020
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The South African Competition Tribunal (Tribunal) has reported that it has confirmed as orders, a further seven consent agreements relating to COVID-19 excessive pricing.

The consent agreements represent settlements reached between the South African Competition Commission (Commission) and firms accused of having engaged in excessive pricing.

To date, 30 consent agreements have been concluded (see our earlier newsflashes accessible here, here, here, here and here). The Tribunal’s orders represent full and final settlement of these matters.

  • Green Hygiene

In March 2020, the Commission received information regarding allegedly excessive prices charged by Green Hygiene, a supplier of washroom dispensers.  Following an investigation, the Commission found Green Hygiene’s mark up on its automatic spray sanitiser dispensers to be excessive. Green Hygiene concluded a settlement agreement with the Commission in terms of which it undertook, inter alia, to contribute ZAR 8 079 to the COVID-19 Solidarity Fund. It also immediately undertook to desist from pricing excessively and reduce its net profit margin on those  items to an agreed maximum percentage for the duration of the national disaster.

  • Eldoram Dienste t/a Eldopark Pharmacy

Following an investigation, the Commission found that the mark up earned by community-based Eldopark Pharmacy, on various types of face masks during March 2020, to be unreasonably high. The pharmacy admitted to pricing excessively and agreed settlement terms with the Commission. In terms of the consent agreement, Eldopark Pharmacy agreed to contribute ZAR 5 500 to the COVID-19 Solidarity Fund, immediately desist from excessively pricing the items concerned, and reduce its mark up on those items to an agreed maximum percentage for the duration of the national disaster. 

  • Mica Baberton

In April 2020, and following a complaint received, the Commission investigated Mica Baberton for excessive pricing. The Commission concluded that the store’s price increases on face mask items were excessive. Mica Baberton concluded a consent agreement with the Commission in terms of which it agreed to donate ZAR 10 000 to the COVID-19 Solidarity Fund, immediately desist from excessive pricing conduct, and reduce its gross profit margin on face masks to an agreed maximum percentage for the duration of the national disaster. 

  •  Food Lover’s Holdings

Following an investigation, the Commission – having regard to historic profit margins – found that Food Lover’s Market Westgate, charged excessive prices for raw ginger – a food item considered essential during the COVID-crisis. The Commission concluded that Food Lover’s average mark up and gross profit margin on raw ginger were unreasonably high without any corresponding cost justification. Food Lover’s admitted to pricing excessively and concluded a consent agreement with the Commission agreeing, inter alia, to desist from the conduct, immediately reduce its gross profit margin on raw ginger to an agreed maximum for the duration of the national disaster, and to donate essential goods (at cost price) to the value of ZAR 18 579 (being a value related to the overcharge) to an old age home in Randfontein.

  • Steelmate

Without admitting liability, Steelmate, which operates in Boksburg, concluded a consent agreement with the Commission in terms of which it agreed, inter alia, to donate ZAR 5 662 to the COVID-19 Solidarity Fund and reduce its gross profit margin on dust masks to an agreed maximum percentage for the duration of the national disaster. This, following the Commission’s conclusion that Steelmate had engaged in excessive pricing of dust masks.

  • Umhlanga Medisport Pharmacy

Following an admission of liability, Umhlgnga-based Medisport Pharmacy agreed, inter alia, to donate hand santisers to the value of ZAR 20 000 to a child support charity in the same area as the pharmacy. This, following an investigation by the Commission which revealed that the pharmacy’s mark up on face masks and hand sanitisers during March and April 2020, were unreasonable.

  • Stelkor Pharmacy

The Commission found that Stelkor Pharmacy, earned an excessive mark up on its 3-ply surgical face masks during April 2020. Stelkor Pharmacy concluded a settlement agreement with the Commission in terms of which it agreed, inter alia, to donate ZAR 12 500 to the COVID-19 Solidarity Fund, immediately desist from the conduct, and to reduce its mark up on face masks to an agreed maximum for the duration of the national disaster.