Companies guilty of excessive pricing could face civil lawsuits

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The Competition Commission says companies found guilty of excessive pricing during the COVID-19 pandemic could face civil damage lawsuits or be slapped with a penalty.

The Competition Tribunal found that Babelegi Workwear and Industrial Supplies were guilty of excessive pricing in the first contested excessive pricing case as the country battles COVID-19 pandemic.

The Tribunal says Babelegi charged excessive prices for face masks and it ordered the Pretoria-based company to pay a fine of over R76 000. 

Competition Commission Deputy Commissioner Hardin Ratshisusu says, “Since the beginning of the pandemic Babelegi increased significantly the price of dust masks. We referred this case to the tribunal because we found that it had increased masks from R41 per box to R500 and these translated to margins in excess of 500%.”

“The excess profits they made were in the region of I think R140 000 to R150 000. The tribunal has put a penalty, but what this firm is liable for further and if there are individuals who are affected – they could file for civil damages,” adds Ratshisusu.

The video below discusses excessive pricing complaints:

Over 500 excessive pricing complaints

At the beginning of April the Competition Commission was flooded with complaints of excessive pricing by retailers since the announcement of the national lockdown.

The commission said over 500 cases were reported, however, half of them fall outside the Competition Act.

Most of the complaints relate to hand sanitisers and face masks, followed by toilet paper, flu medication and other products.

The Commission said it issued over 100 letters to national retailers, suppliers and independent retailers.  In some instances, the price increases are explained as the difference between December/January promotional pricing, and the pricing reverting back to normal in February, coinciding with the pandemic.

There have been instances where price increases are not justified, and the Commission will pursue enforcement.

The Commission has warned retailers to stick to the regulations or face harsh penalties.

In the video below a few weeks ago, the public was urged to report inflated prices:

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